And yet it is also the category most frequently left outside the digital procurement or invoice processing landscape.

Why is external workforce management so complex?
"It all comes down to the nature of the process. External hiring is not standard procurement. You are not working with a product catalogue, but with job profiles and framework agreements. A 'purchase order' in this context is an engagement agreement, with an hourly rate linked to a specific job category. The 'receipt' of the service is not a physical product you tick off in the system, but an approved timesheet. And the invoice? In an ideal situation, it can be generated automatically on the basis of the time registration - through what we call self-billing."

Beyond that, the world of external workforce is highly diverse. Agency workers, freelancers, consultants, secondees: each with their own agreements, their own rate structures, their own administrative logic and, in some cases, their own regulatory framework. A single generic procurement solution rarely covers all of that adequately.

Complexity as opportunity
But within that same complexity lies an opportunity, because the external hiring process is fundamentally repetitive at its core: logging hours, approving them, invoicing. And what is repetitive can be automated. "More and more organisations are importing external hours directly from time registration systems or performance declarations into their P2P environment, using that data as a trigger for invoicing. This not only makes the process more efficient, but also reduces the risk of errors and it finally gives the procurement organisation the insight and control it should have over this category."

Self-billing is an ideal instrument in this regard. Particularly in ongoing hiring relationships with clear rate agreements, the supplier no longer needs to issue an invoice: the client generates it automatically on the basis of approved timesheets. The benefits are mutual: less administrative burden for suppliers - including sole traders or niche agencies without extensive back-office support - and better data quality and faster processing on the client side.

Integration and standardisation as a foundation
Another development accelerating all of this is the growing maturity of data standards within the external workforce sector. In the Netherlands, many suppliers and systems work with the SETU standard - a set of agreements based on HR-XML that enables requests, deployment data, timesheets and invoices to be exchanged between systems in a structured way. This significantly reduces the need for custom development and makes integrations considerably faster and more reliable.

Organisations already working with a Vendor Management System (VMS) do not need to start from scratch. The key lies in the connection: by linking the VMS to the broader S2P platform, a single integrated view of total external hiring emerges - including costs, contract agreements and compliance. No duplication of effort, no separate portals, and no situation where the supplier dictates how your process is structured.

Taking control of your largest cost category
"Many organisations are still operating with a fragmented landscape when it comes to external hiring", Leonne continues. "Separate tools for requests, time registration and invoicing, with poor visibility from the procurement organisation and limited ability to steer. Yet the financial impact is anything but small."

"By structurally incorporating external hiring into your Source to Pay strategy, with the right process support, smart automation and a platform that understands the nuances of this category, you take back control. You not only gain greater insight into rates, contract agreements and total hiring spend (for example broken down by job function or department), but also prevent unauthorised deployment, improve compliance and reduce manual effort. This does require a joined-up approach across Procurement, HR and Finance - and a successful strategy is ultimately a collaboration between all three."

Leonne concludes: "When selecting an S2P solution, it is therefore well worth including external workforce explicitly in your evaluation. Not as an afterthought, but as the category that in all likelihood deserves to be front and centre."

Interested to find out how external hiring fits within your Source to Pay landscape? The consultants at Spendlinq are happy to help, from analysis through to selection and implementation.