The best businesspeople manage to find additional value where others cannot. This means mining through data, staying updated on the latest technology being used within the organization for strategic sourcing, and staying on top of current market trends as well. However, taking this sentiment one step further, strategic businesspeople conduct continuous internal evaluations on their own processes and procedures to target areas that need improvement and enable better spend management. This is how we’ve managed to compile a list of hidden benefits in the source to pay process.
The source to pay process is a process within the procurement department of your organization that manages and handles the entire vertical of the procurement process and the related accounting practices; starting from a purchase requisition all the way to accounts payable. In other words, this means one procurement software system that manages the flow from start to finish. Beginning with the sourcing of vendors and extending through accounting and inventory duties and practices.
Understanding the Source to Pay Process
Before we delve into hidden value and extra benefits that you can withdraw from your source to pay process, let’s briefly overview what does source to pay mean?
The source to pay process, or S2P, is the process in an organization that begins with the identification, negotiation, and contracting of suppliers for goods and services and ends with the purchase order and payment for those goods and services.
How S2P Systems Work
The source to pay life cycle, like many other procurement department activities, is assisted by modern procurement software. This technology relies on big data, business logic, and digital networks to create procurement efficiency within your organization.
The system uses supplier management for supplier data to help your team create better short-lists when it comes to contractors bidding on your request for proposal, or RFP. Targeting a higher quality short-list with more competitive pricing and higher standard of work enables your team to negotiate a competitive price more successfully without compromising the integrity of the end-quality.
Additionally, once a contract is awarded to a supplier, the contract management system moves things along smoothly, creating minimal work for the procurement professional and a more efficient procure to pay process. One of the nice things about making use of S2P software is that by optimizing efficiency within your organization, your employees also save time in their week. This time can then be reallocated to more impactful activities, which further boosts efficiency within your organization.
Benefits of the Source to Pay Process
There are many benefits to incorporating a source to pay s2p process within your procurement organization. As mentioned above, the source to pay process often results in an increased efficiency within the procurement department, and the organization, generating a competitive advantage.
However, going beyond a boost in efficiency, utilizing a source to pay process also guarantees that won contracts get paid out in full. This is helpful for the contractors as it gives them security, confidence, and trust that they will be compensated for their work.
Plus, with procurement staff spending less time compiling short lists, conducting negotiations, and other tedious daily tasks that the S2P software can automate; they have a better experience, which leads to a higher rate of employee satisfaction and an overall improvement in the organizations supply chain management.
Finally, going even further than that, the source to pay process can help you and your management team identify other areas within your organization for continuous improvement. When everything is in a state of disarray, it can be difficult to know where to start because it’s hard to identify what needs the most work. However, when everything but one thing is in pristine condition; that flaw becomes glaring.
In other words, improving your procurement department’s efficiency, which leads to a higher organizational efficiency all together, might help draw attention to other flaws in your organization that require attention.
A Final Thought on the Source to Pay Process
Incorporating the source to pay process into your procurement department can lead to a myriad of departmental and organizational benefits. The right procurement solution can provide the appropriate process automation needed to manage the procurement workflow from sourcing and awarding contracts to the payment and accounting aspects; the source to pay process can entirely revamp the efficiency within your procurement department. For more information on the source to pay process, or anything procurement related, visit our main site.