You may have heard a couple of terms that are gaining popularity among businesses around the globe. Source-to-pay and procure-to-pay. Although these two phrases are similar, they are a little bit different from each other. Source to pay, also known as s2p, is the total process of procurement from the beginning to the end where the beginning is finding and contracting with the sources of goods or services that will be purchased and paid for. These sources could be for business use, or for upselling for a profit. Either way, in order to ensure a profitable procurement process, it is best to have a mapped-out plan that tracks and evaluates every step of the way, from the source of the goods to the time of payment.
Table of Contents
The Planning Stage
The very first step of the s2p process is the planning stage. The only way to map out a process in a way that will be beneficial to the company is to sit down and look at all of the steps that will make up the entire process. From the beginning to the end, every step can be evaluated then optimized for the most effective spending and returns. From choosing the best sources to paying for the goods if each step is carefully executed, it will save the company a substantial amount of money and time.
Discovering the Sources
In many cases, a company still needs to locate and discover sources of goods and services that are reliable, cost-effective, and worthwhile. After the planning stage, the next step in the process is to discover the best sources for the company. This is a time when cultivating relationships is key. matka There are some businesses that will manually seek out the best sources that they can find, and this is an acceptable practice. However, with the help of source-to-pay software, it is possible to get a list of great sources that will most likely be profitable to the business and continue to be profitable and steady. Sometimes finding the right sources can be the most challenging part of the process.
Implementing Contracts
It is in the best interest of all parties to have a written and signed agreement for the services or goods that are sourced. Some businesses will have the authority to give deals and deliver pricing for an agreed amount of services or goods within a timeframe. For instance, a company could sell one can of cleaner for $10, but if you agree to buy cases of cleaner you can have them priced at $5 per can. Whatever the case might be, there should be a written contract that will hold both parties accountable when it comes to paying the agreed amounts.
Buying The Goods
Although it seems like something simple enough, buying is a bit more complicated for some businesses than it is others. Depending on the number of goods or services that are ordered, it can get a little confusing and daunting. This is where the planning stage of the process is a big help. You have mapped out your steps and your needs according to the needs of the business. The contracts have been put into place and signed. Now you have to look through the catalogs and make the proper orders. It is also important to know the details of each contract so that you can make sure that the prices and amounts of goods are upheld.
Paying the Sources
The final stage of the s2p process is paying for the goods or services that were ordered. Every business will have its own needs and unique details. The payment stage is where all of the bills are paid and the invoices are satisfied. With the help of s2p software, organizations are able to simplify and get this part of the process done quickly and efficiently.
Conclusion
After all, is said and done in the procurement world, source to pay is the entire process that leads to a successful transaction of goods and services from one business to another. Finding a good source, then making sure that the source is paid in the end is the whole source-to-pay process in a nutshell.