Achieving Optimal Results: A Step-By-Step Guide To Utilizing Sources-To-Pay Solutions
Procure To Pay Metrics
The initial step to deploying an effective S2P solution is the establishment of the baseline metrics. These benchmarks will provide the yardstick along which performance outcomes can be accurately evaluated and measured. Key metrics to include in the baseline are: overall cash flow, percentage of supplier invoices that are “Pay on Time”, process effectiveness and invoice cycle times, amongst others.
Step 2: Investigate All Sources of DataGiven the huge range of data sources (both internal and external), it is important to investigate all sources to identify the most pertinent data to include in the S2P program. This includes automatic transaction-data extraction systems (such as invoice processing systems and EDI integrations) as well as manual processes (electronic invoicing, etc.)
Step 3: Formalize Procurement and Payment ProcessA comprehensive structure should be created that provides all the information needed to manage accurate, timely payments. This process should include clear steps that provide the user with visible view of the P2P process and the data required to accurately measure and manage performance.
Step 4: Refine Existing MetricsIt is important to review the metrics already being used to ensure that the data being generated is providing an accurate representation of performance and cost savings. This refinement process helps to analyze any existing payment-related processes (such as payment terms and pricing) that need to be altered to make sure that the S2P process is running optimally.
Step 5: Adapt Reporting Cycles Utilize TechnologyDeveloping comprehensive reporting structure is an essential part of the S2P process. Reports should include all of the necessary data points that are necessary to accurately manage the program. Additionally, technology can be utilized to improve the accuracy and efficiency of data extraction and reporting. This includes integrations with ERP, analytics tools, Receivable Automation tools, and more.
Step 6: Refine Processes on an Ongoing BasisIt is important to continually revisit and refine processes in order to correctly identify areas of spend that need to be managed more effectively. This may involve evaluating current processes and streamlining them, or implementing new purchases and contracting processes. Additionally, benchmarking performance metrics such as invoice age, cycle times, and supplier payment terms should be done on regular basis.
Step 7: Invest in Resources and TrainingDeploying successful S2P solution requires an in-depth understanding of metrics, processes, and available technology. To ensure that these objectives are met, it is important to invest in training for staff responsible for the implementation and management of the S2P process.
By following comprehensive, cohesive approach to establishing, deploying, and managing S2P solution, business can effectively measure, track, and analyze performance metrics and make sure that the most cost-effective and accurate outcomes are being achieved. This approach provides C-suite executives with the data necessary to make informed decisions that drive businessuccess in todays competitive market.
