Source to Cash Process in Procurement: Essentials to Know

Iyad Aldalooj
Source to Cash Process in Procurement

In today’s tech-driven market, with tremendous pressure from the competition, all businesses, small or large, need to use whatever trick they have up in their sleeves to boost profits and streamline their operation.

However, for many, the challenge comes when they don’t have a basic understanding of different processes and techniques that can help improve their procurement strategies. One of these processes is the source to cash process, which we’ll explain briefly in this article.

Photo by Windows on Unsplash 

What is the Source to Cash Process?

Source to cash is a relatively under-appreciated term in the field of procurement. It’s essentially the process of managing suppliers, sourcing, overseeing contracts, and catalog management procedures that can provide more value in procurement. 

Source to Pay vs. Source to Cash

Sometimes people confuse these two terms or even use them interchangeably. Here is the difference between them:

S2P focuses on the buyer’s view of purchase or connection. Source to pay covers everything from conducting a sourcing event to choosing one or more vendors by paying for the good or service which led you to enter the market.

S2C refers to how suppliers view the same transaction or deal as order to cash. It begins when a consumer places an order and finishes when the product or service is paid for.

How to Effectively Use Source to Cash in Procurement?

Suppose companies want to take a more comprehensive approach to the S2C cycle, especially to establish good relationships, optimize sourcing, and facilitate ordering. In that case, we should expand our focus to include Source to Cash. We’ll need to bridge the operational gaps between our procedures and technology in order to achieve that goal efficiently. We cannot do that unless we develop the right technological infrastructure.

Bottom Line

So, there you have it. In this article, we tried to briefly touch on the meaning of source to cash process in procurement, how it differs from source to pay and how it can help the company facilitate ordering and establish good relationships with suppliers. For more articles like this, please visit our website or contact us

Subscribe to get updates

Subscribe to get updates

Sign up for regular updates: spend management best practices, expert insights, and industry trends.

Share this blog

Subscribe to get updates

Sign up for regular updates: spend management best practices, expert insights, and industry trends.

Subscribe to get updates

Modernize procurement with Penny Software.
your customized solution.

Learn how our platform uses AI to understand and meet your specific procurement demands, driving operational excellence.