Maverick Spend

What is Maverick Spend?

Maverick spending refers to purchases made outside an organization’s established procurement policies, such as buying off-contract or from unapproved suppliers. It can account for 25–80% of total spending across all businesses.

Maverick expenditure is still a minor leak from negotiated supplier contracts or, at worst, from uncontrolled, rebellious purchasing.

Key Issues with Maverick Spend

Maverick expenditure causes two main problems:

• Loss of pre-negotiated contract savings
• Risk of contract breaches because of volume leakage

Therefore, maverick expenses fail to take advantage of pre-negotiated prices or volume reductions to save money.

The organization risks operational, supply, and reputational issues when purchasing from unlicensed or uncontracted vendors. It can hurt supplier relationships and source-to-pay processes.

Controlling Maverick Spend

1. Analyze Spend: Identify where off-contract purchases occur and assess their cost impact.
2. Educate Teams: Ensure employees understand the importance of centralized procurement and its effect on costs and operations.
3. Improve Processes: Implement smarter procurement systems, approval workflows, and easier purchasing procedures.
4. Plan for Exceptions: Establish an escalation process for urgent or special purchases outside existing contracts.