Your business probably has a lot of expenses. Inventory, payroll, rent, electrical, and all sorts of other overhead that piles up every single month. Most companies are looking for ways to get the highest return on investment possible so they can not only survive – but be profitable. That’s why using an Ivalua consultant is such a great idea.
In fact, a lot of sources say thCoupa consultantat this kind of consulting can help improve your return on investment significantly for a lot of reasons, and that’s the kind of thing most companies are dying to have in their business.
But what exactly can S2P consulting do to help your business grow? There are a lot of things that it does, and today’s article aims to answer that question. There’s a lot of information available on the topic and we decided to go ahead and find as much as we could so we could condense it from this article.
Hopefully, by the time you’re done reading this article, you’ll understand what this type of consulting does to help businesses thrive, even if you decide it’s not best for your company. So, let’s take a look and learn how S2P consulting can help grow your business.
When you’re in business for a long enough period of time, you end up hearing an assortment of buzzwords Some of those buzzwords make sense just based on context clues, but some of them require a little bit more digging if you want to be in the know.
Source-to-pay happens to be one of those buzzwords, and it’s pretty common in some circles. It is a concept that every single business the world over uses whether they realize it or not, but even though that is the case not everyone understands what it means.
So, just in case some of our readers are unaware of what this word means, let’s break it down and make sure that we’re all starting this article off with the same level of base knowledge on the topic.
Source-to-pay, often shortened to S2P, is the entire process, from start to finish, of procuring goods for your company. It’s a few simple steps that get you from point A to point B, let’s take a look at those steps:
- Locating a supplier
- Negotiating prices
- Getting approval from your company
- Placing an order
- Receiving the goods
- Making Your Payment
The whole process is a little more involved than that, but that’s the bare bones of the whole thing from start to finish. Some people might label different steps as different names, and some people might disagree with how we listed them altogether.
At the end of the day, there are a lot of different ways to categorize every single step of your S2P process, but no matter how you learned about it there are two big phases that people go over.
- Source to contract
- Procure to pay
The first one is the steps leading up to the purchase. Finding supplies, negotiating, and getting approval from your company all fall under this step. This is where you get the ball rolling to get your order places so your company can get the supplies it needs.
The second step is where you place the order and everything that comes after that. That means receiving the goods and payment fall into this part of the process. Once you’ve gotten here, you’re halfway done with the process and are at the part where money and goods change hands.
Once you have your goods and the supplier has their money, the process is over. You repeat this process every time that you need to get goods to your company unless you already have a supplier that you like then you would start at step 2 from the first list.
What do S2P Consultants Do?
There are likely a lot of types of contractors that want to work with your company. Whether they do physical labor, accounting, interior design, or any other sort of thing. There are definitely consultants that help with source-to-pay processes.
These consultants do pretty much what you would expect them to do. They sit down with your company and look over your S2P processes and help you figure out how to make them run more smoothly both in the short and long term.
There is a multitude of ways that they go about this. Some consultants just look at your process and make recommendations on how to make things better. Maybe just telling you that you need to find a new supplier or a new piece of software to use.
Some consultants are a lot more hands-on than that. Sometimes they’ll recommend new suppliers that they know of to help, recommend that someone else is in charge of ordering, or even train someone to take over the job.
In fact, it’s not unheard of for consultants to become full-time employees with some companies. Assuming that this is something that both the consultant and company want this can work out very favorably both for your company and for the consultant.
Really, these consultants can help you rebuild your entire S2P process from the ground up, correcting any inefficiencies that it might have had in it. That’s a really great thing for your company and can help you stay profitable, but how does it do that?
S2P Consultants Helping with Your Company’s ROI
Now we get to the good part. How exactly can an S2P consultant help your company get a better return on investment? They have a variety of techniques that they use, but let’s look at a few common ones that are used:
- Helping you find suppliers that sell the same goods at cheaper prices.
- Cutting out inefficiencies in your process to help save you manhours.
- Knowledge of how to negotiate with suppliers to get your company better deals.
- Recommendations of good software to make things run more efficiently.
- A solid understanding of the S2P process from the ground up.
In all of these instances, the consultants are going to know ways that will help you spend less on products while allowing you to sell them at the same price. That on its own increases your return on investment because you’re spending less on every investment.
For example, if the consultant knows a company that sells a product for 5% less than another company, you can get that 5% off the top without ever having to increase prices. That’s a whole 5% profit increase just by making a change in suppliers!
If the consultant already does business with a company, they likely already have some rapport built and will have more leverage for negotiations. If negotiations go well you can stand to save a good deal of money on every shipment that you purchase from them.
Next up, we’re going to look at inefficiencies. By cutting down on the amount of time that an employee takes to do a task, you save money. If you can cut ten minutes off of a task, that adds up to 50 hours a year saved on that task.
50 hours is a lot of man-hours. That’s over a week of a full-time salary. If they make $20 an hour, that adds up to $1,000 of savings a year. That’s nothing to sneeze at as far as savings go, and if you have 2 employees and you can shave 10 minutes off of their tasks a day, that’s $2,000 in savings a year. This is scalable to however many employees you have on this task.
Next, let’s take a look at the kind of software that might be recommended to you. S2P software is incredibly powerful and can make everything in your process run a lot more smoothly. There is software that can help with every step of the process and even software that can put it all in one place for you.
This is all just surface-level savings that can help increase your return on investment by allowing you to save money while charging the same amount. Different consultants will be able to help with different things and will have varying levels of experience dealing with these kinds of issues.
Of course, different levels of experience will come with different price tags. That being said, there will be a variety of price tags that you will see over the course of this process depending on their experience level as well as how in-depth they’re willing to help with your issues.
Getting the Highest Return on Investment Possible
As a business owner, your top priority is likely your bottom line. Knowing what you can do to increase your bottom line can improve your company significantly. Whether you’re an auto shop or a restaurant, little changes can make a huge difference.
Knowing when to bring in a consultant for specific issues can help you make those changes easier. By having someone with experience and an outside perspective take a look at your company, you can get some insight that you might not have gotten otherwise.