Procurement processing was traditionally a logistics function, while accounts payable was an accounting process. It took a different perspective to have these two processes merged and streamlined as part of a single source-to-pay (S2P) process. For Mutual Marketplace and other industry experts, this can be a source of savings and optimised workflow.
The Aim of S2P
S2P is an integrated system from the decision to buy up to the payment processing. What’s different from the traditional discrete systems is that every step is considered as a continuing process with no relationship from items in the same step. That is, the decision buying process is handled by different people — from the actual purchasing, invoicing, and delivery receipt to payment processing. The people who want to buy now (today) will decide on some other purchase from the same supplier on the following day.
The Integration of S2P
The integration process is also simplified, as the documents are matched against each other automatically. This results in a continuous purchasing process that benefits both the buyer and the seller. It also assumes that the rest of the processes are done continuously, including the payment.
What it doesn’t do, however, is to speed up the process. It only simplifies the validation and document verification to improve efficiencies. Still, the payment processing follows the traditional 60-90 day period after the delivery. This way, the S2P process allows the purchaser to improve their cash flow projections. Logistics would have a timely arrival of their purchases, which helps with their delivery scheduling. Finance would also be able to see purchasing data at a glance, with improved efficiency and better financial controls.
S2P builds on the continuous flow of data and processes. It integrates and automates to provide the company management with the necessary financial information at a glance. It also allows for analysis of purchases and subsequent savings. This helps and improves the company’s cash flow and projections.