People, organizations, businesses, and government entities all have unique needs. When it comes to budgeting and acquiring goods and services for a business or organization the way that the source-to-pay strategy is implemented makes a huge difference. Just like when a household goes shopping at the grocery store, they oftentimes will write a list and plan out a budget before they even go into the store, the way an entity shops and buys for things can end up wasting money, or saving money. At the end of the day the more money that is left in the bank, the better.

The Source-to-Pay Endeavor

Source to pay, also known as s2p, is the whole process of finding sources of goods and services, to setting up and fulfilling contracts for the services or goods, through the ordering of the goods, then finally paying for the goods and servees. It is literally the whole process from sourcing goods to paying for goods and everything in between.

It is much like when a family chooses on the grocery store to buy from, visiting the store, finding the things that are on the list, bringing them to the checkout and providing the appropriate coupons for the deals that they have going on, then paying for the groceries at the end. The grocery store of choice is the source, the shopping is the ordering, the coupons are part of solidifying contracts, and the payment is, of course, satisfying the invoice.

The Importance of a Good Strategy

If we visit the grocery store analogy above once more, we can illustrate the importance of a great source compared to a terrible source. If you go into a grocery store where they do not carry one single brand name or item that you need for your home, what good are they? If the store only carries an off-brand, at a more expensive price you would not want to just buy the off-brand and call it a day, would you?

Finding the sources for your business that will best suit your needs, and will be dependable when you need them to be is a valuable asset. Nobody has the time to waste by shopping in a place that may or may not have what they are looking for. This is why it is important to seek out and solidify contracts with sources that will have what you need every time, at the same price that you are expecting to pay.

Problems of Not Planning

Every source-to-pay strategy needs a solid plan, to begin with. If there is no plan in place, you may as well walk into a supermarket in a blindfold and just point out the things that you think are in the direction of your fingertip. Who knows what will end up in your cart, and how much it will all cost in the end.

When you sit down and take a good look at the way that your s2p strategy will unfold before you even start to implement it, you can spot problems before they occur. You can even plan out a way to determine the best sources for you before you even look. You can determine how much of a budget that you have to work with, and how much things will cost you in the end. Although things do not always go as planned in the real world, you can plan for that and have a couple of backup plans to work with. Bad planning can end up being very costly and time-consuming in the end.


So, as you can see the source-to-pay structure of a business, or even at a home, is very important. It can save a lot of money if done the right way. It can also cost a lot of money if done wrong.