SOURCE-TO-PAY | BEST PRACTICES

HOW TO GENERATE MORE FREE CASH FLOW

IMPROVE PROCESS EFFICIENCY AND COST CONTROL TO FUEL GROWTH

WHY DIGITAL TRANSFORMATION?

Improve Process Efficiencies And Spend Analysis

 

To execute an effective growth strategy, operators should focus on supply chain optimization and efficiency.

 

Energy investors demand operators generate more free cash flow internally to finance their growth strategies. Using best practices to improve cost control and operating efficiency is a realistic way to free up funds to invest back into a company—when done correctly.

 

Digitalization of back-office processes and access to spend analytics are key to implementing these new best practices. Together, digitalization and analytics increase process efficiency and enable data-driven decision-making to maximize cost savings and realize economies of scale within your supply chain.

 

This guide maps out step-by-step best practices to digitalize your entire source-to-pay process to reap the benefits of improved operating efficiency and cost savings in your supply chain.

ABOUT SOURCE-TO-PAY

Before diving into the source-to-pay best practices guide, below is information about the differences between procure-to-pay and source-to-pay, details on the source-to-pay process, and an explanation of strategic sourcing and its benefits.

The Difference Between Source-To-Pay and Procure-To-Pay

 

Procure to pay (P2P) starts with the requisition of goods or services and ends when payment is made to the supplier. Source-to-pay (S2P) is where a company chooses preferred vendors to buy from and creates a pricing agreement and pays the vendors after the service or product is delivered. This leads to controlled spend and increased savings.

 

Strategic Sourcing Definition

 

Strategic sourcing is a collaborative process that allows an organization to align purchasing power with its overall value proposition. It improves efficiency and quality through building a robust, diverse supply base. There are important reasons why strategic sourcing is a smart move for organizational success.

  1. Reduces costs, freeing up cash to expand your business.
  2. Mitigates supply chain risk by vetting a supplier before signing a contract
  3. Builds strong vendor relationships, which can lead to faster lead times, higher quality, reliable fulfillment, and better negotiations

Source-To-Pay Best Practices

 

For a sustainable fiscal strategy, energy companies should focus on supply chain optimization and efficiency. Best practices are proven strategies that, when implemented, streamline and optimize your process. At a high level, these include standardized workflows, improved collaboration, visibility and controls, automation, and analytics to measure progress and drive better decisions. The result is improved cost control and operating efficiency. Both of these free up cash flow to invest back into a company—when done correctly.

The Source-To-Pay Process

 

Source-to-pay (S2P) starts when a company chooses preferred vendors to buy from, orders from the select vendors, receives goods or services, processes the invoice, and pays the vendor after the service or product is delivered. The result is more controlled procurement that results in significant savings.

Source-To-Pay Process Steps

 

The steps in the source-to-pay process include:

 

1. Source

2. Contract

3. Order

4. Receive

5. Invoice

6. Pay

How Digitalization Optimizes The Supply Chain

For Fiscally Responsible Operations That Generate Free Cash Flow

DATA-DRIVEN COST MANAGEMENT »

Digitalization captures valuable spend data that, when attributed and categorized properly, enables detailed spend analysis for strategic sourcing, vendor rationalization, and performance benchmarking against market prices for targeted price optimization.

FASTER, COLLABORATIVE WORKFLOWS »

Digitalization enables faster, more collaborative workflows between accounting, finance, operations, and supply chain teams within a company, and external suppliers, increasing operating efficiency. Examples include faster invoice cycles, improved visibility into operations and spend and the ability to do more work in less time or with limited resources.

HOW TO DIGITALIZE THE RIGHT WAY

Connect the Entire Oil And Gas Ecosystem

 

Oil and gas is a complex ecosystem of operators, service and midstream companies, mineral owners, partners and investors. It is critical to connect this ecosystem with a robust, real-time platform that is beneficial to everyone.

 

The Enverus OpenInvoice platform is a cloud-based solution that connects this ecosystem and provides:

  • Ease of access by all participants from anywhere, at any time
  • Low maintenance costs
  • Regular seamless feature and security updates across the platform for all users

 

True or False

Incorrect. It's TRUE! 

Electronic invoicing alone enables operators to reduce their invoice management efforts by 50-80%, and then another 50% with the addition of automatic price-checking and electronic field ticket management!  

You're correct. It's TRUE!

Electronic invoicing alone enables operators to reduce their invoice management efforts by 50-80%, and then another 50% with the addition of automatic price-checking and electronic field ticket management!  

 REVEAL PREDICTABILITY IN AN UNSTABLE MARKET

 

Want to learn more?

Are you ready to increase your capital efficiency to turbo-boost your savings and fuel your growth strategy? Request a meeting with our digital transformation experts today!
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