Purchases done outside of agreed-upon contracts are referred to as “maverick spend.” These purchases may not have been made on purpose, and some may have been made due to real errors or a lack of understanding. Such purchases that deviate from established procurement processes within the organization result in the company not being able to benefit from its preferred supplier agreements offering better product quality, higher discounts, etc., and can become expensive to firms in the long run.
There are several ways to control maverick spend:
- An understanding of the costs associated with maverick spending in a firm, as well as the areas where such spending is prevalent, can help in controlling the situation. A spend analysis solution with automation of approval workflows and auditability can give increased visibility and help organizations trace back to spend details and take precautionary measures to eliminate maverick spend.
- Procurement specialists should educate employees on the procurement best practices and train them to follow established procedures. Such trainings will help in reengineering the entire purchasing behavior of the company.
- Adopt robust sourcing and procurement solutions that can manage both direct and indirect spend from a single platform and integrate easily with your ERP.
- Not only procurement professionals, but every individual working in the firm should also be aware of the expenditure associated with their area. Knowing the shared accountability helps in controlling maverick spend.