A Checklist For Selecting A Source-To-Pay Solution
Direct Materials Sourcing
Successful adoption of source-to-pay platform requires careful consideration and comprehensive evaluation of the vendor’s capabilities. Companies of various sizes and in various industries now employ advanced technologies to help optimize their operational processes. business of all types can take advantage of the flexibility and stability that is offered through automated source-to-pay solutions. The ability to track, monitor and analyze supplier performance, as well as track payments and invoices, streamlines the procurement process while combating inefficiencies translating directly into cost savings and improved supplier relations.
For executives in the finance department, selecting source-to-pay platform can be daunting task. Many factors must be weighed on case-by-case basis such as the size of an organization, the type of procurement process already in place, budgetary restrictions, and the complexity of the transaction types. Further, an analysis of the ability of the vendor to provide platform customized to the buyer’s specific needs should be completed. In order to maximize productivity, source-to-pay vendor must have robust systems and processes that are both secure and customizable.
The selection process for source-to-pay platform can be streamlined by preparing checklist. Before beginning your evaluation, ensure you have identified your specific needs and have compiled list of source-to-pay vendors you wish to investigate. This checklist can be used to narrow down your choices.
1. Identify the ideal features and capabilities of the platform.
Having clear and concise vision of the ideal source-to-pay platform for your organization is paramount. You will want to explore the source-to-pay vendors that are best suited to address your specific needs. The ideal platform should automate, streamline and monitor all aspects of the procurement process from the initial purchase order to the final delivery. Identify the different types of transactions you will be leveraging (e.g., marketplaces, auctions, reverse auctions, etc.) and varying levels of user access. Further, explore how the platform will capture data, track invoices and payments, and enable dispute resolution.
2. Evaluate existing vendor relationships.
It is important to evaluate the existing relationships you have with suppliers to determine their ability to operate within the source-to-pay platform. Ask for feedback from suppliers on their current experience. You may also be able to establish baseline of what type of supplier is available and which ones have the best rates. If you are currently in negotiations with suppliers, consider leveraging the source-to-pay platform?s features to leverage pricing or payment terms.
3. Investigate vendor reputation.
Do background research to determine source-to-pay vendors? reputation, references and customer reviews. Also investigate their security protocols and features that provide enhanced services such as fraud detection. Ensure the vendor is compliant with statutory regulations and has the capability to support annual financial and payer audits.
4. Evaluate pricing and payment terms.
It is important to assess the vendor?s pricing strategy and payment terms. Evaluate the overall cost of ownership and compare across vendors. Additionally, evaluate the vendors? ability to accept your specific payment methods, as well as their methodology for calculating fees and processing costs.
5. Ascertain vendor stability.
Investigate the vendor?s financials to understand their stability and ability to remain financially sound in the long term. It is unwise to select vendor that appears to struggle in this area, as it could lead to disruption in service further down the line.
In summary, selecting source-to-pay platform is long-term commitment and thorough evaluation of the capabilities and features of different vendors must be conducted. Following the above checklist can improve the effectiveness of your due diligence and lead to more informed decision.
