They are familiar terms in the procurement department: the source to pay process and procure to pay process. These services are meant to make the procurement process more efficient, but what exactly do terms mean? What is the difference and what are the benefits of these services? We are going to cover all of these in this blog. Curious about the answers? Read on quickly!
What is source to pay?
Through source to pay services, an organization’s procurement process can be set up more efficiently. If this entire process is set up more efficiently, it will save the organization a lot of time and money. This is of course interesting because it allows the time and money to be put into other parts or departments within the organization. Source to pay involves the entire process from sourcing to payment. So this entire process is mapped out and looked at where it can be arranged more efficiently.
What are the benefits?
Source to pay services make it possible to digitize the entire process, which of course brings many advantages. These include, for example, reducing the supplier base. This can be reduced by as much as 80%. Often organizations have many different suppliers. That means there is a contact person for each supplier, a separate payment term and a separate invoice. When this is reduced, there will be a lot less contact moments. In addition, it can also provide a lot more insight into supplier performance and costs. Furthermore, there are other benefits, these are listed below.
- When you want insight into performance and expenses
- Strengthen supplier relationships because there is more overview
- Better communication with suppliers
- Improve purchasing conditions
- Digitization reduces manual work and therefore paper consumption
What is procure to pay?
Whereas source to pay provides 360-degree insight into the performance and expenditure of a procurement process, procure to pay maps only part of this process. Procure to pay is limited to a number of stages within the source to pay process. This involves analyzing the number of goods purchased. Procure to pay thus focuses purely on a portion of the entire source to pay process.
What are the benefits?
By automating the entire procure to pay process, the organization will experience the following benefits:
- Save costs by automating invoice processing. This increases efficiency and eliminates the need to do it manually. More overview is generated and the possibility of making mistakes is much smaller.
- Furthermore, there is an up-to-date overview of all obligations that need to be done and it offers more insight into all current contracts.
In other words, a lot of money and time can be saved by starting with source to pay services or procure to pay services. It also offers more overview and will improve efficiency within the organization.