One thing that the majority of existing businesses have in common is that they need products and/or services to operate. This is the reason why the source-to-pay process is so important. Although every business will be unique to its own needs and obligations, all of them will benefit from having a structurally solid procurement process that is custom-fitted for their very own specifications. Not sure what source-to-pay is? You are not alone. Keep reading, you might learn a couple of things.

The Sourcing of the Goods

In simple terms, the source-to-pay, also known as the s2p process is the entire operation of the procurement of goods and services for a company from the sourcing aspect all the way through to the payment part. From sourcing goods through the unique steps that will vary with every business, through the payment process. 

The very first step in every successful endeavor is to plan the whole strategy out before any steps are made. Every business will differ, but the basic structure of every s2p strategy will be:

• Planning
• Sourcing
• Buying / Ordering
• Paying

With these basic four steps, every business can make or break the entire way that the company finds, obtains, receives, and pays for all of the goods and or services that are required to run the everyday tasks of the business.

Planning for Success

You may or may not be the type of person that likes to plan things out before you get started doing them. When it comes to the structure of the money of your business, it is a good idea to plan ahead and orchestrate the best strategy possible for your company’s needs. During the planning step of the s2p process, you can lay the whole strategy out on paper, or in a digital format, that will allow you and everybody else involved to take a look at the steps and the strategies within each step as you determine what direction will best suit which department.

In many cases, the planning phase can uncover problems that you never knew existed, and help you to strategize ways to avoid the same kinds of problems in the future.

Generating the Best Sources

Sometimes the sources of the products or services that you get for your company are the strongholds of your success. If you attach yourself to a bad source, it could cause you severe problems down the road when you least expect it. A great planning stage can help to clear a path towards the best sources that are available for your business, and the way to find them.

The modern-day source-to-pay can be done by way of a software platform that runs on artificial intelligence. This smart software can help to locate the best possible sources for your business based on true data that has been accumulated on each source. This strategy can even find several sources that are great matches for you and compare them with each other so that you can pick and choose what is best for you…or allow the software to make the decision. Either way, finding great sources can be very easy with the help of AI.

Buying and Ordering Goods and Services

After the sources have been established and all of the deals have been made, it will time to order the goods and services that you found in your sources. Most of the time this can be done online, or by way of catalogs that the supplier will furnish for you. 

This is also the time to double-check that the pricing and the deals that you agreed to during the sourcing conversations and in the contracts are upheld at the time of checkout.

Paying for the Goods and Services

The final stage of the s2p strategy is to pay the bills and make everybody happy. Many businesses of today use smart software to square up all of their invoices and get everything settled.

As we mentioned earlier, every business will have unique needs. However, this outline that we created is the general format of a great source-to-pay strategy.