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Procure to Pay vs Purchase to Pay vs Source to Pay

When businesses are looking to digitise their procurement and accounts payable processes, there are a range of strategies and tools to consider.

In addition to procure to pay (P2P), many organisations are now turning to source to pay (S2P) to enhance efficiency while reducing costs.

But what are the differences between the procure-to-pay, purchase-to-pay, and source-to pay-processes? And which model is best for your business? We explore in our latest guide.

What is Procure to Pay?

The procure-to- pay (P2P) process combines a company’s procurement and accounts payable functions. The process starts when the need arises for goods or services and ends with the payment for those goods or services.

The P2P process covers requisitioning, purchasing, receiving, paying for, and accounting for goods and services. Throughout the process, cost savings and value creation are prioritised.

What is Purchase to Pay?

Purchase to pay is another term for procure to pay or P2P. It covers the entire process from point of order through payment for the goods or services.

What is Source to Pay?

Also known as S2P, source to pay is the process that organisations go through in order to source, order, and pay for goods and services. The source-to-pay process includes all stages from strategic sourcing and contract lifecycle through to procurement, invoice management, payment processing, and more. 

This model is designed for organisations with complex procurement needs, who require a dedicated sourcing function. 

Automating the source-to-pay process offers several benefits including spend visibility, mitigating supply chain risk, and improving productivity levels. 

Procure vs Purchase in P2P

Procure to pay and purchase to pay refer to the same process. They are simply different names referring to the same thing.

COMPARING P2P AND S2P

Firstly, while the P2P and S2P process are similar in many ways, they also have several differences – the main one that S2P starts one step earlier than P2P, with the sourcing of goods.

The procure to pay process usually begins with the requisition of goods and services and ends when the accounts payable team pays the vendor.

Source to pay goes one step further. With S2P, strategic sourcing becomes part of the process, ensuring that the best vendors are selected, and negotiating deals with them. This helps to optimise internal controls, enhance supply chain efficiency, and simplify vendor relationship management.

Summary

At Basware, we support an open S2P ecosystem philosophy, enabling co-existence and connection amongst the best-of-breed solutions and multiple vendors, all backed by our robust integration capabilities and strong core.
Find out more about our best-of-breed eco-system here.

To find out more about the benefits of P2P and S2P, and the differences between them, please get in touch or book a free demo. Alternatively, explore our P2P transformation guides:

Procure-to-Pay Solutions

Procure to Pay process
explained

Learn more

Source-to-Pay Solutions

Procure to Pay implementation
& challenges

Learn more