Source to Pay

Source to Pay refers to the end-to-end process government contractors undertake to search for suppliers and subcontractors, vet them, negotiate prices, ultimately sign a contract, and manage payments and schedules until a project is complete, and money has changed hands.

The Source to Pay (S2P) process encompasses several essential steps beginning with sourcing, where contractors identify, evaluate, and select new suppliers, vendors or subcontractors for the required goods or services. Once an ideal partner is chosen, the next step is to negotiate and execute a contract with them.

Following the contract signing, the procurement phase comes into play. Contractors are responsible for managing the process of approving and ordering the necessary goods and services as outlined in the agreement. At the same time, resource management is crucial, involving tracking labor, recording time and expenses, and ensuring adequate resources are allocated for the project.

When services are rendered or goods are received, the accounts payable stage begins. Contractors gather invoices and match them with corresponding accounts payable vouchers and purchase orders. This step is vital for accurate financial management and record-keeping.

Once the contractual obligations have been fulfilled, contractors conduct retrospectives to evaluate the project, analyzing both successes and failures. This assessment enables them to identify areas of improvement and ensure future projects achieve greater success.

Embracing a robust Source to Pay framework empowers government contractors to overcome the inherent complexities of procurement, ultimately leading to improved efficiency, successful project outcomes and strengthened business processes.

When government contractors optimize the Source to Pay process, projects move forward faster, and margins are protected and even enhanced. For these reasons, more and more forward-thinking government contractors are moving away from managing projects using outdated, legacy enterprise resource planning (ERP) solutions and choosing to invest in robust and compliant S2P systems.

Deltek Costpoint is a powerful Source to Pay solution that enables you to digitize and streamline the entire procurement process — from vendor selection through purchase order. With the ability to collaborate, process payments, and produce compliance reporting, Costpoint gives you everything you need to become a world-class procurement department, all in one place.

By making a smart investment in Source to Pay software, you can transform your contracting firm’s approach to procurement, building a faster, more productive, more accurate team while accelerating procurement cycles, reducing days payable outstanding, and ensuring compliance.