The different stages of the source to pay process

The Source-to-Pay (S2P) process connects strategic sourcing and procurement with financial operations - from start to finish, including supplier management, sourcing, contract management, purchasing and payment of invoices:
 

Supplier Relationship Management (SRM)

An integral part of the source to pay process, Supplier Relationship Management (SRM) is the process of managing all types of supplier contracts, and associated purchases, to drive maximum value from every supplier contract. Good suppliers are an important asset to any organisation since they provide the goods and services that facilitate what an organisation does. Each supplier therefore represents a relationship which needs to be nurtured, as well as an element of risk which needs to be managed.
 

Sourcing

Sourcing (also known as eSourcing, and a core part of the Source-to-Pay process) refers to the digital tools and processes used to streamline, simplify and improve strategic sourcing activities and procurement processes to obtain these supplies. Top-performing organisations exploit the latest technologies to conduct more sourcing events and direct a higher proportion of purchases through formal contracts without the need for doubling overhead, jeopardising quality or increasing exposure to risk.
 

Contract Management

Contract Management is the process of managing all types of supplier contracts, and associated purchases, to drive maximum value from every supplier contract. Purchase and delivery activity are automatically collected for analysis of supplier performance and buyer commitments, and contract dates and other criteria are continually monitored, alerting the appropriate people when reviews or actions are needed.
 

Marketplace

A Marketplace (or eMarketplace) links Procurement and Finance in the the Source-to-Pay process. An online website where certain categories of products or services are bought and sold, a procurement marketplace is a platform that connects staff with approved suppliers and contracts when they are purchasing products and services.
 

Procure-to-Pay (P2P)

Procure-to-Pay (P2P) is made up of a number of stages that describe the end-to-end buying process, from initial request and purchase through to invoicing and payment for good/services received. With a P2P system, organisations can control the whole purchasing process - from order request and approval, to order creation and receipt - across all products and services, in one system. Employees order within the defined procedures, policies and budgets.
 

Accounts Payable Automation

Accounts Payable automation software, anables organisations to capture all invoices and convert non electronic data (paper and PDFs) into eInvoices, validate their accuracy by checking for a PO, duplicates and a valid supplier, and then transfer them into a finance system for matching and payment approval.
 

In summary

The source to pay (S2P) process covers the the steps for organisations to effectively procure goods and services, from identifying a need to paying the supplier. It combines strategic sourcing with procurement operations and payment processing, and it’s a critical function in both Finance and Procurement.