In case you run an workplace provide retailer and determine you have to buy numerous notebooks to inventory your retailer, you’re going to try to discover the very best quality, most inexpensive notebooks you can purchase in bulk. You’ll go searching at totally different pocket book suppliers, assess the prices of working with every, determine if the standard of their merchandise match what you’re searching for, after which decide who to buy the notebooks from.
When finishing these actions, you’re beginning the supply to pay (S2P) course of, which is one thing each enterprise goes by means of when working with suppliers. Protecting bills low whereas sustaining regular income streams is important to the success of what you are promoting, and mastering the S2P course of is without doubt one of the handiest methods to scale back enterprise prices.
Listed here are some questions that this text makes an attempt to reply:
- What’s supply to pay?
- What’s the distinction between S2P and P2P?
- What’s the source-to-pay course of?
- How does supply to pay profit what you are promoting?
What’s Supply to Pay?
Supply to pay, repeatedly known as S2P, is all the end-to-end means of deciding whether or not you want a sure services or products, discovering one of the best provider to work with, initiating the procure-to-pay course of, making a purchase order, and receiving the products in query. Like most enterprise processes in the present day, navigating the supply to pay course of with the correct S2P software program resolution has quite a few advantages. You’ll discover simpler provider relationship administration, sooner supply timelines, and lowered pricing fashions.
The supply to pay course of might appear to be it’s very transactional, and components of it are, however it’s additionally extremely depending on vendor relationships, sensible strategizing, and fixed enchancment. In case you or your sourcing crew could make the S2P course of a precedence, you’ll see simply what number of advantages can come from it.
S2P vs. Procure to Pay
It’s possible you’ll be pondering, “What’s supply to pay? Is it the identical as procure to pay?”
S2P and P2P will not be the identical factor; the P2P course of is embedded within the S2P course of. Briefly, the S2P course of is bigger; it encompasses extra steps than the P2P course of. Nevertheless, the P2P course of is a subset of sure steps inside the S2P course of.
S2P begins the second {that a} enterprise chief decides a brand new good or service is required from a provider. It then strikes to researching suppliers, assessing costs, sending data requests, finalizing provider picks, creating buy orders, receiving the merchandise, and fulfilling bill funds. It may possibly take weeks and even months to get by means of the supply to pay course of in its entirety.
The P2P course of, alternatively, begins after a provider has been chosen. The procurement crew is handed the baton from the sourcing crew and continues to work by means of the procurement actions of the S2P course of. These embody managing buy orders and buy requisitions, monitoring product supply timelines, making certain the receipt of the products, and dealing with the accounts payable crew to finish the seller fee related to the bill that matches the transaction.
Supply-to-Pay Course of Overview
In case your sourcing crew primarily has a guidelines of all the things that must be accomplished all through the supply to pay course of, they’re much less more likely to miss something, expose what you are promoting to danger, or miss out on a helpful sourcing alternative. Even additional, standardizing source-to-pay motion objects makes it extra potential to trim the fats from the method, discover synergies in what you are promoting, and implement a supply to pay system that allows course of automation and streamlines provider onboarding.
The steps within the S2P course of are:
Figuring out Enterprise Wants
With out the necessity for a brand new services or products, a enterprise merely wouldn’t provoke the supply to pay course of. Bear in mind, in enterprise, there must be demand. On this case, your want for notebooks is the demand. As soon as that’s established, begin buying round.
Sourcing Vendor Choices
There are a whole lot of pocket book distributors on the market. Discover a number of that look promising. Do you want the availability they’ve? Does their pricing appear truthful? You should use a supply to pay system to assist establish potential distributors, monitor the S2P course of with every, and create a database of knowledge should you ever undergo this course of once more (which you’ll!).
Choosing a Vendor
When you’ve despatched out requests for data (RFIs), proposals (RFPs), and quotes (RFQs), you’ll get a collection of responses from the distributors you despatched them to. You’ll take a look at the responses, determine which vendor most closely fits your wants, and select one or a number of distributors to maneuver ahead with relying in your procurement wants.
Finalizing Contracts
With the distributors chosen, it’s time to place pen to paper. You’ll create legally binding contracts that define the provider partnership, onboard the provider(s) into your supply to pay system, and get the procurement crew concerned to complete out the P2P part of the S2P course of.
Procurement
The contract above isn’t the identical as a purchase order order. With the provider contract in place, the procurement crew will then create a purchase order order for what you want and ship it to the provider. As soon as the provider accepts the PO, it’s legally binding for each events. Lastly, the seller will ship the notebooks to your retailer in accordance with the acquisition order.
Processing Vendor Bill
After the products have been despatched, you’ll obtain an bill from the provider detailing how a lot you have to pay to finish the transaction. Remember to undergo the three-way matching course of to make sure the bill matches the PO and the objects acquired.
Finishing Fee
At this level, the accounts payable crew will full the fee. Relying on the settlement with the provider, they may use EFT, ACH, or EDI funds. AP automation software program is a good software for simplifying the settlement of invoices.
Advantages of Supply-to-Pay
The supply to pay course of has been round for a very long time. Though the steps have stayed comparatively the identical, the best way the steps are accomplished has shifted with the usage of digital instruments, P2P software program, and automation capabilities.
Since it’s extra streamlined than ever, companies are seeing infinite advantages from considerate, optimized source-to-pay administration, resembling:
- Enhanced vendor relationships are a beautiful results of in the present day’s S2P course of. Optimized course of steps make it simpler to work collectively, and know-how might help create deal buildings that make everybody blissful.
- By discovering one of the best distributors at one of the best costs, your group can get monetary savings. Whether or not it’s shopping for in bulk, agreeing to a long-term provider contract, or swapping out an outdated vendor for a brand new one, source-to-pay is bound that can assist you understand financial savings over time.
- Information monitoring is way more correct. This helps with audit trails, vendor evaluation, and enterprise forecasting on this house.
- As your relationship with every provider continues, you’ll want to make sure that the partnership stays favorable. The supply to pay course of might help you monitor particular metrics with ease, monitoring the efficiency of your suppliers and getting forward of any points.
- Inner collaboration is supported by each step. Your sourcing crew has to work effectively with procurement, and on the finish of the method, accounts payable steps in to get it throughout the end line. This collaboration can break down purposeful silos and illustrate the advantages of working collectively in numerous capacities.
Wanting Ahead
The source-to-pay system brings sourcing, procurement, and accounts payable features collectively. With out every purposeful professional doing their job, the method would disintegrate and jeopardize the well being of what you are promoting. In case you run an workplace provide retailer and may’t appear to maintain notebooks stocked as a result of your S2P crew is failing, you could possibly very effectively exit of enterprise. Though we take a look at the S2P course of holistically, enchancment alternatives might be discovered when drilling into every perform’s duties and performance.
AP might make up the tail finish of the method however making certain that invoices are paid on time is essential to holding up your finish of the deal. With the correct AP automation software program like Nanonets, you may keep away from widespread pitfalls within the S2P course of. Efficient AP administration might help mitigate the S2P challenges that come together with late funds, incorrect bill administration, and provider relationships as a complete. Once you optimize the provider fee course of, everybody wins.
Know-how is part of enterprise in the present day, it doesn’t matter what trade you’re working in. How are you going to fold know-how into processes like S2P to make the lives of your workers simpler, construct higher partnerships externally, and get probably the most bang on your buck? In case you’re unsure the place to start out, implementing a supply to pay system is the proper place.