Maverick spending, that is purchases made outside approved procurement processes, quietly drains millions from enterprise budgets while undermining supplier relationships and creating risk exposure. This guide shows you exactly how to detect, measure, and eliminate rogue spending using proven frameworks based on a decade of work with enterprise businesses at Suplari.
Key Takeaways
- Maverick spend costs organizations 5-16% of negotiated savings annually. For a $500M spend organization, that's $15-55M left on the table
- Maverick spend has four categories of root causes and can be measured effectively with modern-day spend and contract analytics.
- Top performers can reach +90% contract compliance using a combination of AI-powered spend analytics, guided buying tools, and automated compliance monitoring
What is maverick spend, exactly?
Maverick spend occurs when employees purchase goods or services outside established procurement processes, approved suppliers, or negotiated contract terms. Maverick spending can occur even with suppliers that have been approved in the past.
Critical distinction: Maverick spend differs from tail spend. Tail spend refers to low-value purchases across many suppliers. It may be unmanaged but isn't necessarily non-compliant. Maverick spend specifically involves circumventing established processes.
According to The Hackett Group's research, organizations lose between 5-16% of targeted savings to maverick buying.
The most common types of maverick spending include:
- Unapproved suppliers (74% cite as primary concern) – Buying from vendors not vetted by procurement
- Wrong channels (68%) – Using approved suppliers but bypassing e-procurement systems
- Unapproved categories (43%) – Buying outside authorized spend areas
- Off-contract pricing (34%) – Paying rates different from negotiated contracts
Root causes of maverick spend
Maverick spend can occur for different reasons across different organizations. Generally you can group key reasons into four categories: technology gaps, cultural issues, information failures and process design flaws.
Understanding why employees bypass procurement processes is essential for designing effective solutions. These root causes fall into four categories.
How to measure maverick spend
You can't control what you can't measure. Before implementing solutions, procurement teams need to establish a baseline understanding of their maverick spend problem—how much is occurring, where it's happening, and what it's costing the organization.
Calculate your maverick spend rate
The maverick spend rate is the foundational metric for understanding non-compliant purchasing. It measures the percentage of total organizational spending that occurs outside established procurement processes and approved contracts.
Maverick Spend Rate = (Total Spend Outside Approved Channels / Total Company Spend) × 100
For example, if your organization spends $50 million annually and $7.5 million bypasses procurement processes, your maverick spend rate is 15%.
According to The Hackett Group research, organizations lose between 5-16% of targeted savings to maverick buying. For a company with $500M in annual spend, that translates to $25-80M in lost value every year.
Understand the three levels of maverick spend
Not all maverick spend is created equal. Modern spend analysis distinguishes between three types based on visibility and control:
Fully unknown and uncontrolled
You receive an invoice from an unknown vendor for goods or services you weren't aware of. Neither the expense nor the supplier appears in established procurement records. This represents the highest risk category—completely outside your procurement ecosystem.
Partially known and partly controlled
The purchase involves a vendor you know and have worked with before, but you don't know what was purchased. The approved supplier was used, but the established procurement process wasn't fully followed. This often happens when employees contact suppliers directly rather than going through proper channels.
Known and partly controlled
You know the vendor and the nature of the purchase, but details like pricing or quantities deviate from contract terms. The buyer may have used an approved supplier but negotiated different terms or exceeded authorized volumes without proper approval.
Each level requires different detection methods and remediation strategies. Complete visibility starts with identifying which types of maverick spend exist in your organization.
Quantify the financial impact
Measuring maverick spend isn't just about compliance rates. You need to quantify the actual financial impact to build the business case for change.
Lost savings from negotiated contracts
Calculate the difference between contracted rates and what you actually paid for off-contract purchases. Organizations report up to 16% loss in negotiated savings due to maverick spend.
Volume discount opportunities missed
When spending fragments across multiple suppliers instead of consolidating with preferred vendors, you lose volume leverage. Measure potential discounts you could capture by consolidating maverick spend with contracted suppliers.
Processing cost premium
Maverick purchases create administrative burden—invoice reconciliation, supplier onboarding, payment processing—that exceeds the value of what you're buying. Calculate the fully-loaded cost to process each maverick transaction versus purchases through established channels.
Risk exposure and compliance costs
Unapproved suppliers may not meet quality standards, ESG requirements, or regulatory compliance obligations. While harder to quantify, these risks create potential financial exposure through contract breaches, quality failures, or regulatory penalties.
Establish your baseline before implementing solutions
Don't wait for perfect data to start measuring. Even basic visibility into maverick spend drives better decision-making than operating blind.
Start by analyzing 6-12 months of historical spend data. Modern AI platforms can deliver insights from imperfect data in weeks—you don't need a perfect enterprise data infrastructure to begin.
Focus initially on high-value categories where maverick spend creates the greatest financial impact. As one Suplari customer discovered, analyzing just their marketing contracts (not complete spend data) revealed inefficiencies that shaped their entire category optimization strategy for the following year.
Track your maverick spend rate monthly or quarterly. The goal isn't to reach zero—some flexibility will always be necessary for legitimate business needs. Top-performing organizations achieve 90%+ contract compliance through the right combination of visibility, processes, and tools.
The measurement foundation you establish through spend analytics becomes the basis for everything that follows. Without it, you're implementing solutions without knowing whether they work.
With a clear understanding of your maverick spend baseline and financial impact, you're ready to implement targeted strategies that address root causes and drive measurable compliance improvements.
Strategies to Control Maverick Spend
Proven methods to ensure compliance and reduce non-compliant purchasing in your procurement organization
You can't remove maverick spend overnight, but these six strategies help procurement teams reduce off-contract purchasing, improve compliance rates, and capture negotiated savings.
1. Establish Complete Spend Visibility
The foundation for controlling maverick spend is knowing where your money actually goes. Modern AI-powered spend analytics platforms deliver insights from imperfect data in weeks, not years.
✓Off-contract purchasing patterns by department and supplier
✓Price variance between actual and contracted rates
✓Supplier consolidation opportunities in the tail
✓Payment term discrepancies leaving money on the table
Real Impact: One Fortune 2000 CFO discovered payment terms that should have converted to Net 60 were still processed as immediate payment, with over $150,000 in working capital unnecessarily tied up.
2. Simplify the Purchasing Process
Complex approval workflows don't prevent maverick spend—they cause it. Make compliant purchasing easier than non-compliant alternatives.
✓Create streamlined procurement protocols with clear criteria
✓Deploy guided buying technology for approved suppliers
✓Enable self-service with AI agents for business stakeholders
✓Establish fast, compliant paths for legitimate urgency
3. Establish and Communicate Clear Policies
You can't comply with policies you don't know exist. Embed policy guidance directly in the purchasing experience rather than burying it in intranet sites.
✓Tooltips explaining why certain suppliers are preferred
✓Real-time contract compliance checking before submission
✓Role-specific training tailored to purchasing patterns
✓Share impact of non-compliance with concrete examples
Top Performers: 100% of high-performing organizations provide online training on buying processes and policies, compared to only 33% of average performers (The Hackett Group).
4. Provide Regular Training and Support
Maverick spend often results from ignorance rather than defiance. Employees simply don't know the approved process or believe their purchase is too small to matter.
✓Dedicated procurement help desk with specialist access
✓Quarterly business reviews with high-spend departments
✓Self-service resources: FAQs, videos, buying guides
✓New employee onboarding on procurement processes
5. Centralize Contract Management
Fragmented contract management creates confusion about which suppliers to use and what pricing applies. This confusion directly drives maverick spend.
✓Searchable repository where teams can instantly verify terms
✓Integration with purchasing systems for automatic pricing
✓Real-time tracking of volume commitments
✓Automated alerts for off-contract purchase attempts
The Visibility Payoff: AI-powered platforms can automatically match purchase orders to contracts, flagging pricing discrepancies before payment—recoverable money that would remain invisible without automation.
6. Foster a Culture of Shared Accountability
Procurement can't police compliance alone. Reducing maverick spend requires organization-wide commitment where department heads understand their purchasing responsibilities.
✓Share compliance metrics by department with benchmarks
✓Recognition for departments achieving high compliance
✓Include procurement compliance in performance reviews
✓Involve stakeholders in policy development for buy-in
What AI-powered spend analytics reveals
Traditional spend analysis methods—spreadsheets and manual data reviews—struggle to detect maverick spending at scale. Modern AI-powered spend analytics platforms like Suplari automatically identify non-compliant purchasing patterns across your entire spend landscape.
These platforms reveal:
Off-contract purchasing patterns by department, category, and supplier
AI identifies which business units drive the most maverick spend and which categories show the highest non-compliance rates. This targeting enables focused intervention rather than organization-wide policy enforcement.
Price variance between contracted and actual rates
Automated contract-to-invoice matching flags when you pay more than negotiated rates, even with approved suppliers. One Suplari customer discovered systematic pricing leakage where actual payments exceeded contracted rates by 12%—recoverable money that remained invisible without automated detection.
Duplicate supplier records masking true spend concentration
Suppliers often appear in your systems under multiple names and variations. AI consolidates these duplicates to reveal actual spending with each supplier, exposing hidden maverick spend where employees use different supplier records to bypass controls.
Tail spend patterns indicating process workarounds
High volumes of small purchases from unapproved suppliers suggest employees are bypassing procurement for routine items. AI identifies these patterns even when individual transactions seem insignificant.
Payment term discrepancies leaving money on the table
Automated analysis catches when negotiated payment terms aren't applied consistently. One Fortune 2000 CFO using Suplari discovered payment terms that should have converted to Net 60 eighteen months earlier were still processed as immediate payment, with over $150,000 in working capital unnecessarily tied up.
The bottom line on wrangling maverick spend
Maverick spending isn't just a procurement annoyance. It's a multi-million dollar problem that undermines strategic initiatives, damages supplier relationships, and creates unnecessary risk exposure. But it's also solvable.
The six strategies outlined above work together as a system:
- Visibility through analytics identifies where maverick spend occurs and quantifies the cost.
- Simplified processes remove the incentive to find workarounds.
- Clear policies ensure employees know what's expected.
- Training and support enable compliance rather than just demanding it.
- Centralized contract management makes the approved path obvious.
- Shared accountability transforms compliance from procurement's problem to everyone's responsibility.
The technology foundation matters. AI-powered spend analytics platforms like Suplari deliver the visibility and intelligence that make everything else possible. Instead of waiting months or years for perfect data, modern platforms can analyze your spending patterns in weeks, automatically identifying off-contract purchases, quantifying savings leakage, and highlighting your highest-priority opportunities.
About Suplari
Suplari is a procurement intelligence solution that helps businesses modernize procurement operations using AI. Suplari provides actionable intelligence to manage suppliers, deliver savings and manage compliance beyond the limits of traditional spend analytics. Suplari’s unique AI data management foundation empowers enterprise businesses to transform procurement operating models with reliable, AI-ready data.
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