In theory, your purchasing process is in place. But does it hold up in day-to-day operations?
Indirect purchases are often spread across departments, sites, suppliers and spend categories. When staff buy outside approved routes, purchase orders are raised late, supplier information becomes fragmented, and contract terms are harder to enforce.
Finance only sees costs after they're incurred. Procurement and Accounts Payable must spend time tracing purchases, correcting information and resolving problems that began earlier in the process.
This process review outlines five signs that your approach to indirect spend management has become reactive and is costing your organisation more time and money than it has to. Use it to identify where visibility, control and negotiated value may be slipping away.
Key takeaways
See why invoices arriving without a purchase order create rework for Accounts Payable
Recognise when supplier records can no longer be relied on
Understand why staff take the easiest buying route, even when agreements are in place
Identify where contracts go unmanaged after award and value is lost at renewal
Find out why basic spend questions have become a manual reporting exercise
Different organisations may have different purchasing needs, but the underlying challenge is the same: information must be captured during the purchasing process rather than reconstructed afterwards.
Real-world examples of improved spend visibility
The National Trust
The National Trust brought greater control to £360m of annual third-party spend. Its wider procurement strategy delivered an estimated £30m savings programme and reduced its active supplier database from 24,000 to 12,000.
estimated savings programme
British Land
British Land replaced a largely manual quarterly reporting exercise with real-time visibility of purchase commitments and supplier invoices. Finance can now trace each supplier invoice back to the initial commitment.
visibility of purchase commitments and supplier invoices
See where indirect spend is costing your organisation more than is has to
Complete the form to download your process review and identify where reactive processes may be increasing cost, risk and manual workload.
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FAQs
What is indirect spend?
Indirect spend covers the goods and services an organisation needs to operate but which do not directly form part of its core product or service. This can include facilities, professional services, software, travel, equipment and office supplies.
Because these purchases are often made across different departments, sites and suppliers (an activity also referred to as indirect procurement), they can be difficult to see and control through one central process.
Why is indirect spend difficult to manage?
Individual indirect purchases may be relatively small or infrequent, but collectively they can represent a significant area of spend. Control weakens when staff cannot easily find approved suppliers, purchasing routes are difficult to use, or when information is held across disconnected systems and local records.
This can lead to off-contract spend, duplicated suppliers, late purchase orders and limited visibility of costs before they are incurred.
How can organisations reduce maverick spend?
Maverick spend occurs when staff buy outside approved suppliers, contracts or purchasing processes. Policy and training help, but employees also need an approved buying route that is easy to find and use.
Giving staff access to accurate supplier information and agreed purchasing options makes compliant buying the practical choice. It also helps Procurement protect negotiated value and gives Finance earlier visibility of spend.
Why do supplier invoices arrive without purchase orders?
Supplier invoices often arrive without purchase orders (POs) because the order was placed directly with the supplier or outside of the agreed purchasing process. A PO may then be raised retrospectively, after the cost has already been incurred. Accounts Payable must trace the purchase, confirm where the cost belongs and obtain approval before payment can proceed.
This increases manual workload and gives Finance teams a less reliable view of budgets and cash flow. Improving purchase order compliance (often enforced by a No PO, No Pay policy) reduces this manual work, but only where staff have a purchasing route that is straightforward and easy to follow.
How do accurate supplier records improve spend visibility?
Accurate, centralised supplier records make it easier to identify who the organisation is buying from and how much is being spent across the full supplier relationship.
They also reduce duplicate records and repeated checks, while helping staff select approved suppliers and giving Finance and Procurement a more reliable basis for reporting and decision-making.
What happens when contracts are unmanaged after award?
Once a supplier is appointed, responsibility for monitoring the agreement can become unclear. Obligations are missed, and performance can slip when no one is consistently checking delivery against what was agreed.
By renewal time, Procurement often lacks the evidence to challenge performance or negotiate from a strong position. Active contract management keeps that evidence in one place and gives Finance earlier sight of upcoming commitments.