Source to Pay: from business need to supplier payment

Source to Pay connects an approved need for goods or services to a supplier payment. Purchasing, receiving, the requesting team, and finance each provide evidence before the next team acts. The workflow helps answer what was ordered, what arrived or was performed, what the supplier billed, and what was paid.

When to use this workflow

Use it for inventory, production materials, freight, or outside services. Distributors, manufacturers, retailers, and service organizations may use different approval and receipt policies, but the handoff from purchase commitment to payment should remain clear.

Featured capabilities

• Purchase Demand and RFQ Workbench support the need and supplier decision when product demand or supplier comparison applies.
• Purchase orders and receipts connect the supplier commitment to quantities accepted by the receiving team.
• Supplier bills and payments carry the reviewed liability into payment and bank reconciliation.
• AP Cash Planning supports a reviewed weekly payment plan where that feature is enabled.

People and preparation

The requesting team explains what is needed and verifies a service result. Purchasing makes the supplier commitment. Receiving checks physical goods. Accounts payable reviews the supplier bill, and the payment owner and finance confirm disbursement and bank settlement. Before ordering, agree on specifications, quantity, destination, needed date, supplier terms, and the organization's spending authority. Stocked goods and services have different delivery evidence; neither should be assumed from the purchase order alone.

Confirm the need and commit the purchase

The requester and purchasing define the need. Confirm the item or service, quantity, specifications, needed date, delivery location, and budget or approval requirements. If product demand drives the request, review Purchase Demand and Readiness. For an indirect purchase, follow your organization's requisition policy. An urgent request still needs a named decision maker before a supplier commitment.

Purchasing chooses the supplier. Compare price, availability, delivery terms, and acceptable substitutions when needed. Use RFQ Workbench if multiple supplier responses must be reviewed. Create and approve the purchase order with the supplier, facility, currency, quantities, prices, dates, and applicable tax details. Send it to the supplier and retain the confirmation so receiving knows what to expect.

Verify delivery and review the bill

Receiving checks physical goods. Compare the shipment to the purchase order, inspect as required, record the accepted quantities and any discrepancies, and place stocked goods in the appropriate inventory location. Review freight, duty, or tariff costs where they apply to the landed cost of stock. Do not treat a supplier's shipping notice as a receipt. For services or other non-stock purchases, the requesting team confirms that the work was performed and supplies the completion evidence required by policy.

Accounts payable checks the claim for payment. Match the supplier bill to the purchase order, receipt, or service evidence. Resolve quantity, price, date, tax, duplicate-bill, and credit differences before approval or posting. A bill may need to wait for a missing receipt or for purchasing to resolve a supplier dispute. Keep the exception attached to an owner instead of paying an unexplained variance.

Plan payment and reconcile the result

Hand approved bills to the payment owner for scheduling. Consider due dates, discounts, supplier commitments, and the organization's cash policy. Prepare the payment through the applicable payment workflow, then record the completed payment and reconcile it to bank activity. Preparing a payment batch is not the same as sending money or clearing the bank.

Decisions and handoffs at each stage

1. Confirm need

   Owner: Requester and purchasing. Input: material or service requirement.

   Work and decision: Check specification, quantity, date, location, and authority to spend. Resolve a duplicate or unclear request before supplier selection.

   Evidence: Purchase demand or the organization's approved requisition evidence.

   Handoff: Purchasing receives a defined need and approval route.

2. Select and commit

   Owner: Purchasing. Input: approved need and supplier options.

   Work and decision: Compare price, availability, delivery, and substitutions where needed. Approve and send the purchase order; keep the supplier confirmation.

   Evidence: RFQ comparison where used, purchase order, supplier confirmation.

   Handoff: Supplier has the commitment; receiving or requester knows what to expect.

3. Verify delivery

   Owner: Receiving or service requester. Input: arriving goods or completed service.

   Work and decision: Physically inspect and count goods, or confirm service completion. Record accepted quantities and discrepancies; do not treat a shipping notice as receipt.

   Evidence: Purchase receipt and inventory result, or policy-required service evidence.

   Handoff: Accounts payable receives evidence of what was accepted.

4. Review supplier bill

   Owner: Accounts payable. Input: supplier invoice plus order and delivery evidence.

   Work and decision: Check quantity, price, tax, date, and duplicates. Route a variance to purchasing or receiving before approval or posting.

   Evidence: Reviewed supplier bill and linked order or receipt.

   Handoff: Payment owner receives an approved payable or a named exception.

5. Pay and reconcile

   Owner: Payment owner and finance. Input: approved bill and cash plan.

   Work and decision: Decide when to pay under policy, process the disbursement, then match the completed payment to bank activity.

   Evidence: Payment record and bank reconciliation.

   Handoff: The supplier balance and cash movement are supported, or an unmatched item remains assigned.

Variations and exceptions

For stocked goods, receiving records accepted quantities and inventory placement; for services, the requesting team supplies completion evidence. A partial delivery leaves an open purchase commitment and requires a decision about the remaining quantity. A price, tax, or quantity difference on the bill returns to purchasing or receiving for resolution before the payment handoff. Where freight, duty, or tariff affects stock cost, review those amounts in the receipt and landed-cost process before relying on the inventory value.

Completion check

The business need, supplier decision, purchase order, receipt or delivery evidence, bill, payment, and bank result can be traced together. Open purchase, receipt, bill, or payment exceptions retain an owner and next action. A recorded receipt or approved bill alone does not complete the supplier-payment process.

Related workflows

Demand to Replenishment supplies a material-buying decision when stock or production needs drive the purchase. Physical receipts continue through Purchase Order to Stocked Inventory. Supplier payment planning continues through Weekly AP Cash Management.