Source-to-Pay to drive strategic and sustainable growth

Source to pay, abbreviated as s2p, is a process followed by most businesses to fulfil their procurement needs. The source to pay process begins with identifying the needs for specific goods within a department of the company and ends with paying the supplier from whom the requirement is procured or obtained. Hence, s2p meaning is simply the procurement of goods and materials as per your company’s needs.

While source to pay refers to the process of procuring goods and materials for the business, procure-to-pay is a subset of the s2p process. This means procure to pay deals more with just the purchasing process i.e. invoicing, raising PO, three-way matching. Whereas, source to pay is a holistic process that includes the entire process from identifying needs for a certain material to procuring it from the vendor and then paying the vendor.

While source to settle process focuses more on the settlement process or final payment stage only, source to pay focuses on the entire procurement lifecycle. The S2P process is usually done on a source to pay software, which automates the entire process into simple steps. It makes the process more efficient as it brings all stages to one unified solution.

Most companies use a source to pay solution or an s2p software to conduct the entire process. Source to pay is an exhaustive process that includes various stages such as demand identification, supplier identification to fulfil demand, contract negotiation, PO creation and finally receiving goods and making payments to the supplier. Using source to pay systems helps businesses automate and streamline their goods procurement process so they can be efficient.

An easy-to-understand example of a source to pay could be a manufacturer identifying the need for a certain raw material to build a printing machine, then looking for the right suppliers who can provide the raw material, developing and finalizing contracts to agree on terms of work. This is followed by the creation of a PO and receiving the raw material from the supplier. The manufacturers finally make payment to the supplier.

The steps followed in the s2p process while using a source to pay platform include identification of a need, strategic sourcing of suppliers, negotiation of contract, creation of purchase order, and receiving the goods. There is one step of final payment processing that comes after the company has received the goods from the supplier. Source to pay tools help in conducting this comprehensive process end to end without any errors and with minimal human intervention.

S2P procurement is important to businesses as it helps automate and streamline the procurement process while making it efficient. It helps in automating manual tasks thus reducing errors. Most S2P platforms usually help in ensuring compliance with regulatory standards so the finance process of procurement is in check. Hence, S2P using a source to pay procurement software is the ideal way to structure and organize your procurement process.

Some of the best source to pay solutions are Procol, Coupa, and Proactis. Procol helps you make your S2P process efficient, optimized, and error-free. It reduces your turnaround time for vendor payments, thus enhancing your business’ vendor relations. Other alternatives like Ivalua, Zip, and Medium also help in managing the source to pay process in one common platform.