S2P (Source To Pay) Definition

In business, S2P or Source-to-Pay is the process of acquiring goods or services from External suppliers. The term is most commonly used in large organizations that have a centralized procurement department and use an Enterprise Resource Planning (ERP) system or similar software to manage their procurement process.

The S2P process begins with the identification of a need for goods or services within the organization. This may be triggered by a requirement from another department within the organization, or it may be generated internally. Once the need has been identified, the procurement department will work with the relevant stakeholders to develop specifications for the required goods or services.

Once the specifications have been finalized, the procurement department will issue a Request for Proposal (RFP) to potential suppliers. The RFP will include all relevant information about the project, including timelines, budget, and delivery requirements. Suppliers will then submit proposals to the organization, and the procurement department will evaluate these proposals against predetermined criteria.

Once a supplier has been selected, the organization will enter into negotiations with the supplier to finalize pricing and other terms of the contract. Once both parties have agreed on all terms, a contract will be signed and work on supplying the goods or services will begin.

Throughout this process, it is important for both buyers and sellers to maintain clear communication in order to avoid misunderstandings that could delay or derail the project. After completion of delivery and acceptance of payment, both