As the world continues to advance in the realm of technology businesses are steadily evolving towards a digital age. The source-to-pay strategies that many of the companies are using today are as efficient and effective as ever. At a time when every penny counts, it is important to have a system in place that makes the most out of every cent that goes into and out of the business. What is the s2p process? You might be surprised at how complex, yet simple it really is.
From Source to Pay
The methodology behind the source-to-pay process is fairly simple. When it comes to the procurement strategy of the company, the beginning factors are where to get the goods and services that are needed for the business. The procurement process does not typically contain the source part of it because the sources have already been established. The entire s2p process is comprised of several steps, depending on the structure of the business, that include the sourcing of the goods, the ordering or buying of the goods, then the paying for the goods…and everything in between. Source to pay simply means from the source of the services and goods to the payment of the services and goods.
The Planning Phase
The planning phase of the source-to-pay strategy is the most important step. If the process is not planned out, it can end up causing some major problems. Putting the whole process plan out on paper, or even on a chalkboard for everybody that is involved to see how the process will go through from beginning to end can pinpoint problems that could occur and prevent them from happening in the first place.
Depending on the needs of your business each step in the process could be different. In the planning phase, you can determine your specific needs, goals, and ways to achieve all of them before you even start.
The Sourcing Phase
During the sourcing phase of the source-to-pay endeavor, the company will find the best sources for their needs and reach out to them in order to make an arrangement. What makes the s2p strategy so different today is that there is a powerful type of software that uses artificial intelligence to determine the best possible sources that have the highest probability of success for the company. Using a platform to match up great sources with the best prices and highest value can save a considerable amount of time, and money.
The Buying Phase
The buying phase of the s2p process is when the actual ordering and solidifying of the deals that were made in the sourcing phase. Most times all of the goods and/or services that were sourced will be available to order online or through a catalog.
When it comes time to order whatever good or service that is being bought, it is important to verify that whatever negotiations that were made during the sourcing phase are held up. For example, if you agreed to purchase a certain amount of items for a certain price, you may have to take a few extra steps to ensure that you get the price that you agreed upon. In many cases, the default pricing will come up for the cost, if you don’t make arrangements to override the default pricing, you could end up paying more than you bargained for.
The Paying Phase
The last and final phase of the source-to-pay operation is when the payments are made and all of the parties have been satisfied. If everything was accounted for and taken into consideration during the planning phase, the paying phase should be a piece of cake.
Of course, as we have mentioned before, each business will have its own unique needs and specifications. However, if the source-to-pay procedure is planned out, and properly implemented it could save money and even bring in some extra revenue.