What is the Source to Pay Process?

What is the Source to Pay Process?

While getting the right product at the right price seems like a simple goal, as companies grow, ensuring that you’re spending properly can become increasingly challenging.

Finding the best deals from the most reliable sources is not so easy for everybody. The source to pay process, although the rewards are great, can be a daunting task for most companies to manage, build, and maintain.

Thanks to a handful of innovators in procurement software, the traditional way of finding suppliers, administering contracts, and transacting orders has become much simpler, much faster, and less costly. For organizations who find the prospect of defining or digitizing their S2P processes daunting, software platforms are now being sold with out-of-the-box solutions based on best practices that can be adopted quickly and cheaply.

Let’s take a look at the steps that modern technology and artificial intelligence have been able to simplify and implement quickly and smoothly.

  • Plan: Understand your organization’s needs and plan your procurement.
  • Source: Find the right supplier, negotiate and execute the contract.
  • Buy: Buy the goods and/or services from your contract.
  • Pay: Receive and process invoices and pay your suppliers.

Of course, every business will have its unique needs and demands when creating a personalized source-to-pay process. However, regardless of how much or how little you may focus on in one area or the other, each of these steps is critical to keeping your organization thriving.


The first step in the process is to have a plan. Before going out and finding a supplier, you need to understand what your procurement needs are. Depending on the size of your organization, this could be achieved with something as simple as a team meeting, or something as complex as the development of a formal procurement plan.


Once you have a plan in place, the next step is to find your sources. The process of finding a supplier, contracting with that supplier, and managing your relationship with that supplier is at the heart of the source-to-pay process. This stage of the process is also where a large share of the value is generated. Finding the right suppliers, negotiating the right prices, and contractually locking in those prices can have a significant impact on the bottom line.

Some organizations can cultivate these relationships and connect with the appropriate vendors manually by making phone calls, scheduling meetings, and so on. However, many other successful businesses utilize a source-to-pay consulting company to lower the demands of time and finances that incur from the many hours that it takes to form valuable, long-lasting partnerships.


Now that you have the right supplier, a contract, and have the supplier onboarded, the next step is to order your goods. This is where things can get tricky. Although you have established your suppliers and have contracts in place, who will make sure that the prices that were negotiated are being kept? This is where using a digitized S2P platform can come in handy.

Although there are many establishments that still do all of their procurement processes the old fashioned way, and there is nothing wrong with that, they could be losing a lot of money and time. The source-to-pay platforms that are available for organizations today have the capacity to ensure that you keep the savings that you negotiated, and keep the whole process on track the way it is supposed to be.


The last step in the source to pay process is to pay. You have planned out your procurement, sourced your goods, and solidified a contract with a great supplier. Now what? You implement a process that will ensure that you consistently pay the amount that you and your suppliers agreed upon. The suppliers have done what they were supposed to do, now it is your turn to make sure that they get the money that you agreed upon. Having an effective source-to-pay platform in place helps to maintain your end of the bargain as well as everybody else’s. At the end of the process, the needs are met, the bills are paid, and everybody is happy.

Simplify Your Process

It seems like the four steps in the source-to-pay process should be easy enough. In real life, they can be a little challenging for the ones who aren’t prepared. The best way in these modern times to run a smooth procurement procedure is to digitize the whole process and let the software handle the grunt work. A great source-to-pay consulting service is a huge step in the right direction.