HOW TO STOP SPEND-MAVERICKS
FLYING TOO CLOSE TO THE SUN
Maverick spend is endemic , and it ’ s costing business dear . P2P software can help control it , but works best as part of a joined-up strategy
WRITTEN BY : SEAN ASHCROFT & HELEN ADAMS
Spend management is vital to companies of all sizes . It helps cut risk , drive growth , and increase profit . Hence procure-to-pay ( P2P ) systems , which companies use to control how they procure the goods and services they need to do business .
But a system is only ever as good as those who use it , and many employees choose to spend outside of their company ’ s prescribed procurement procedures . This kind of spend goes by many names . Some call it ‘ tail ’ spend , others ‘ rogue ’ spend , but the best-known description is probably ‘ maverick ’ spend .
The dangerous cost of maverick spend Maverick spend usually involves small-value purchases that are made outside of agreed contracts , and often without the knowledge of the procurement team . Such spending can be costly on many different levels , says Jaggaer , a provider of cloud-based spend management solutions .
Such costs include :
• Legal : Maverick spending can impact contract fulfilment and expose businesses to legal risks .
• Reputational : Maverick purchases are not always small ; one or more might be key to a project . What if those suppliers go bust , or provide sub-standard work or products ? Your company takes a reputational hit .
• Relational : If preferred suppliers hear of non-approved spending with a rival , this might harm your relationship with them .
• Time : Your procurement , finance and warehouse teams are left to reconcile paperwork , locate the arrival of stock , and identify who has undertaken the rogue transaction .
Maverick spending is no minor problem ; it ’ s endemic . According to the Chartered
108 January 2022