In spend management practices, source-to-pay (S2P) is an upgraded version of procure-to-pay (P2P). It won’t be wrong to say it is an end-to-end process. S2P essentially adds the prefix of strategic sourcing to the procurement process. In other words, when you implement the S2P approach, you make finding the most suitable vendors and working suitable deals with them a part of the process as well.
Steps of S2P
Source-to-pay procurement flow can easily be understood by this breakdown.
- The demand for a service or product arises that leads to the commissioning of identifying and evaluating potential vendors
- A bid is prepared that asks for proposals, quotes, and pertinent information from the potential vendors
- The applied potential vendors will be shortlisted
- Price and contract term negotiations are made with the shortlisted suppliers/vendors
- Successful vendors become part of the supplier management database
- After contract signings, the procurement team takes over the charge and takes care of the rest of the steps (that is P2P).
Benefits of S2P Process
The implementation of the S2P process helps organizations improve their supplier management. Also, it enables organizations to practice due diligence in finding the best supplier. This S2P implementation eventually translates into procuring good quality at competitive rates. All these beneficial features collectively work to streamline the spend management of an organization.
SimplyPurchasing by Microsys is robust procurement management software that works on many fronts to improve organizational performance. It improves the procurement process and helps to get a better hold of spend management. The use of SimplyPurchasing can also make the implementation of the S2P process easy.