Basic understanding of Source to Pay complete process Flow to the commerce and Finance students

Source to Pay complete process Flow

Hello Friends today we are going to understand the complete process of Source to Pay and how this is different from Procure to Pay process flow.

Source to pay ius wider term of procure to pay process flow. In source to pay work flow, sourcing part also works .

Sourcing team works for the vendor setup, vendor master data updatation, , where procurement team use the vendor , data set up by sourcing team.

source to pay is similar process like procure to pay , there is extra step of vendor data management included in the source to pay process flow.

Sorce to Pay Work Flow

 Step:- 1. Accounts Payable/Procure to Pay process starts with the process of need Identification of products/ raw material .

Step:- 2. Once the need is identified , the need send to procurement department with the Purchases Requisition Note (PRN),

Step:- 3. Procurement team identify the supplier to whom the acquire a specified goods/products and send them a purchases order.

Step:- 3(a). Sourcing team will work , if there is no vendor set up for a specific product or goods, then sourcing team will invite quotation according to the goods description and requirement of the product from the market with required quality and quantity, sourcing team finalize the vendor set up process while taking some conditions and merit in view. after vendor setup , procurement team will send the PO to the concerned vendor for the supply of goods/products.  

Step:- 4. After receiving Purchases Order (PO) from the procurement team, Supplier send the required Raw material/Products to the warehouse of the buyer organization, here the warehouse employee receives the goods and confirm the goods received and creates a goods received document.

Step:- 5. Vendor sends a invoice to accounts payable department of the buyer and warehouse sends the goods received documents to AP Department.

After this invoice will be processed and paid off on the due date as per the terms of payment with the vendor.

Accounts Payable is the department in which we verify the details entered into the goods received and invoice are same.