Whitepaper Wednesday - Breakdowns in the Source-To-Pay Process

Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. This week, I'll be reviewing a whitepaper entitled "Source To Pay 2.0" from Genpact and Purchasing Magazine.

This whitepaper focuses mostly on the problems found in processes leading from a sourcing project to the actual payment to the supplier rather than the solutions to those problems. Nonetheless, it does a good job of directing attention to some issues that deserve it, especially common errors such that happen when "treating [an organization's] source-to-pay subprocesses as discrete rather than interrelated parts of a connected whole."

One of those common errors is negotiating payment terms at a strategic level that are not actually implemented at the tactical level. This happens when "inadequate vendor-master data controls result in incorrect terms being set up in transactional systems." The whitepaper also reveals that non-PO invoices are often paid without ever referencing the contract and that "payment terms are often simply overridden in accounts payable functions where there is pressure to clear backlogs" and suggests that payment analytics can reveal disparities.

The whitepaper also reminds the reader that on-time payment can help sourcing organizations negotiate payment term extensions and early payment can result in price discounts, both resulting in a reduction of working capital requirements - something many organizations have homed in on since the credit crisis began in 2008.

The whitepaper offers another example of processes ripe for improvement by discussing eProcurement and eSourcing before building the case for Genpact's services. If you'd like your own copy of this whitepaper, you can obtain one from Purchasing Magazine's Web site (registration required).

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Find More Good Resources For Procurement Leaders?
Check Out Our Web Site's New Whitepaper Section At
http://www.NextLevelPurchasing.com/WPcharles