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Source to pay or procure to pay? What is the difference?

You have probably heard of source to pay and procure to pay services. By means of this service, it is possible to optimize the purchasing process. But what does it entail exactly? And when do you make use of this service? You can read the answers to these questions in this blog.

What is source to pay?

Source to pay services helps organizations to set up the entire procurement process more efficiently. When a process is set up efficiently, it can save a lot of time and money. By means of source to pay, the procurement process is mapped from sourcing to payment. For each phase we look at what can be optimized. By looking at this per phase, it is possible to look at the details. 

Reducing the supplier base

Companies often have a supplier database that is too large. By reducing this file, you can already ensure much greater efficiency within the purchasing process. A large supplier file means that you spend a lot of time on all the different suppliers. Each supplier has its own invoice, payment term and contact person. If you have hundreds of suppliers, you also have hundreds of invoices, payment terms and contacts. Reducing the number of suppliers ensures that there is only one large supplier, with therefore only one contact, one invoice and one payment term. 

Source to pay refers to the entire end-to-end process of contracting, ordering and paying for goods and/or services. It provides and 360 degree insight into your performance and expenditure of the organization.

What is procure to pay?

Procure to pay also looks at setting up the procurement process more efficiently, only this insight is more limited in comparison to source to pay. Procure to pay only looks at which goods are purchased and what can be improved here.

With source to pay you get insight into the entire procurement process and with procure to pay you get insight into a part of it.