How to uncover hidden costs and maverick spend in indirect procurement

  By Sean Cheasley, Solution Engineer at Proactis

The risk you can’t afford to ignore: Maverick spend

In today’s complex business environment, control and compliance are no longer just the domain of procurement, they are also non-negotiable priorities for Finance. However despite this growing urgency, many organisations still allow retrospective supplier creation and after-the-fact PO raising to fall under the radar within Accounts Payable.

These practices don’t just bypass procurement policy, they expose the business to serious risks of compliance failures, missed savings, reduced visibility and fraud.

The real cost of maverick spend

Maverick or “off-contract” spend happens when employees purchase goods or services outside of approved processes – without POs, without approved suppliers or without proper oversight. While these transactions may seem harmless or time saving at first glance, the hidden costs add up quickly:

• Higher prices from non-contracted suppliers.
• Duplicated or unnecessary purchases.
• Increased processing effort due to manual invoice handling.
• Lack of leverage in future supplier negotiations.
• Reduced audit readiness and regulatory risk exposure.

Why late POs and manual supplier setup are a red flag

When POs are raised after an invoice arrives – or worse, after the service is delivered – your organisation has already lost its critical controls. Retrospective POs eliminate the opportunity for pre-approval, budget checks or sourcing alternatives. Similarly, allowing suppliers to be added manually without procurement and/or supply chain involvement bypasses due diligence checks, increasing the risk of:

• Working with non-compliant or high-risk suppliers.
• Inaccurate or missing supplier data.
• Weak or no contract enforcement.
• Payment delays and supplier dissatisfaction.
• Lower credit ratings.

Finance at the frontline of risk

Accounts Payable is often the last line of defence, but shouldn’t it be the first place these risks are detected?

Relying on AP teams to catch and correct upstream failures creates inefficiency and stress, and turns finance into a reactive function.

Modern finance functions must move upstream, embedding control earlier in the process through automation, smart workflows and tighter collaboration with Procurement.

A better way forward: Prevention over Correction

In a recent webinar, I shared practical steps to help organisations expose and eliminate the hidden risks:

• Centralise and control supplier onboarding: Implement guided processes that ensure compliance, check for risks and ensure data integrity from the start.
• Mandate pre-approved POs: Use automation to prevent invoice processing without a valid, approved purchase order in place.
• Use analytics to surface rogue spend: Spot patterns and identify repeat offenders to drive behavioural change and targeted interventions.
• Break down silos between Finance and Procurement: Align goals and systems to create a shared sense of accountability and streamline processes end-to-end.

The bottom line

Maverick spend isn’t just a procurement issue, it’s a finance liability. Tackling it requires more than policy; it demands integrated systems, shared accountability and a commitment to proactive control.

The longer you wait to address it, the more it costs you – in time, money and risk.

Want to learn more?

Watch the full webinar to explore real-world strategies for eliminating maverick spend and strengthening financial controls across your organisation.
 
Register to access the webinar replay