By Ridge Yusuf
You’ve probably heard of source to pay or procure to pay, but what exactly are these terms? What does it mean? In this blog, we explain what exactly it is, what the benefits are and what this could mean for your organization?
What is source to pay?
Through source to pay services, organizations can be assisted in setting up the procurement process more efficiently. By organizing this process efficiently you can save a lot of time and money. Time and money that is better spent on other things. And who doesn’t want to save time and money? The definition of source to pay refers to the entire process from source to payment. It refers to the synergy between the procurement and finance departments. If these departments work well together, you can benefit. The work done in the procurement department is often also relevant to the finance departments and vice versa, of course.
What are the benefits of source to pay?
So applying source to pay services brings many benefits. First, the procurement and finance departments will work better together. Obviously, your organization will benefit greatly from this. In addition to these benefits, there are of course other advantages. Source to pay also offers digitization of the entire process. Benefits include:
- It ensures that you need less paper and also less manual work
- You get insight on expenses and performance whenever you want
- You can improve purchasing conditions with it
- The supplier base is reduced by up to 80%.
- You get more overview and strengthen your supplier relations
- The process has become predictable and you can respond to it
- Better communication with suppliers
- You can set up and monitor supplier performance
Just benefits that come with the source to pay process.
Procure to pay is that the same thing?
If you’ve heard of source to pay, you’ve probably heard of procure to pay. Procure to pay is not the same as source to pay. This is because with source to pay, you get 360-degree visibility into all performance and expenses. With procure to pay, it is limited to a few phases within the entire soruce to pay process. With procure to pay, it is limited to the analysis on purchased goods.
What can it do for your organization?
So for your organization, it can mean a lot to start with source to pay. So, first of all, you can save a lot of money and time. This time can be used in other departments to set it up more efficiently. Second, through source to pay services, the entire process can be digitized so that you have an overview of all suppliers and more. The supplier base can be reduced and that means you only have 1 contact person, 1 payment term and 1 invoice. That saves a lot for the invoicing department. In addition, this service ensures a better synergy between the procurement and the finance department.
Infographic Created By Corcentric, Supporting Your Business Goals With Managed Accounts Receivable
