What You Need to Know About the Source-to-Pay Process?
The source-to-pay process can be the mechanism in a business that either makes it or breaks it. If the business has a rock-solid s2p operation that is fine-tuned in order to get the most out of each transaction, it is golden. If it has a process that allows money to be double spent, unaccounted for, or leak into unnecessary expenses, it could be in jeopardy of failing. You might believe that you know everything there is to know about the s2p process, but you might be completely wrong. Why take the chance? Read on.
It Pays to Plan
The most important step in the source-to-pay process is the planning phase. It is crucial that in the early developmental stages of the process that the people involved in the operation get a chance to unpack everything that will take place within the process. In the planning stage, every area that needs attention can be attended to, and any problem areas where money could be leaking away can be identified and stopped. Many companies hire an s2p consultant to help them through the planning period.
The Sources Make a Difference
After the planning stage is finalized and it is time to move forward with the source-to-pay process, the next step will be the sourcing phase. Sourcing goes beyond procuring in terms of the discovery of new and reliable sources for goods and services. Since technology is making such huge waves in the corporate world, it is not a surprise that the latest and greatest way to acquire great sources is by using highly advanced s2p software that can establish the best sources for a particular company based on the needs of that company. For example, artificial intelligence is put to use so that an algorithm will find top sources that provide the goods and services that the company needs, at the best costs. On top of costs, the software can determine how big of a risk it would be to invest in a source, and how reliable the source is. Great sources are ones that:
- Provide high-quality goods or services
- Have lower prices, or are willing to negotiate
- Have an excellent reputation
- Will potentially deliver a substantial ROI
Having sources that can not only save money but put potentially make money are the best to have.
Pay Attention to the Details
After the sources have been acquired there will need to be a plan in place that will keep everybody that is involved with any contracts happy. In many cases when a deal is made during the sourcing process, a certain price for a good or service will not be publicly listed or even recognized. It will be up to the procurement facilitator to make sure that each price that was negotiated gets satisfied during the buying phase of the process. Say, for instance, in order to seal a contract deal with a supplier you both agreed for $30 less for every 100 items bought. That price may not be an automatic price, so if you don’t make sure that it is implemented, you may never get it.
The digital age is upon us, and technology is everywhere. It is no surprise that there is software out there that is specifically designed and calibrated for the source-to-pay process. Highly sophisticated software coupled with modern-day artificial intelligence makes difficult processes as easy as typing in data and clicking a button. There is software available to business owners that want to streamline and automate most of their procurement processes. The great thing about using high-tech software to do the dirty work is that there are fewer errors. This means that the software can detect flaws in an already established system and change them into assets. No more money leaks or faulty business deals.
It is crucial to know everything that you can about your own source-to-pay process. Taking a deeper look at the way that you do things could uncover a few money leaks that you had no idea were in existence. Money comes and goes through the process like water through the gills of a fish. The best way to know where you can improve is to keep tabs on the whole thing and watch closely.