7 Strategies to Curb Maverick Spend

Maverick spend is an unwanted expenditure that occurs when employees purchase goods or services outside of a company's official procurement process.

It's a problem that affects many organizations, and it can have serious consequences for both their finances and operations.

What Is Maverick Spend?

Maverick spend can happen for a variety of reasons, including the need for goods or services that the company doesn't normally purchase, the desire to save time or money or simply a lack of awareness of the company's procurement policies. Whatever the reason, maverick spend can be a major problem for companies.

The Cost of Maverick Spend

Maverick spend can be costly in a variety of ways. Not only is it a drain on the organization's finances, but it can also lead to inefficient use of resources, higher costs for goods and services and even legal and compliance issues.

One of the biggest financial costs of maverick spend is the potential for overspending. When employees purchase goods or services outside of the official procurement process, they often don't have the same access to discounts and bulk buying opportunities that the organization might have. This can lead to higher costs overall.

In addition, maverick spend can lead to poor budget management. When employees purchase goods or services outside of the official procurement process, it can be difficult to track expenditures and ensure that they stay within budget. This can lead to inefficient use of resources and higher costs overall.

Finally, maverick spend can lead to legal and compliance issues. When employees purchase goods or services outside of the official procurement process, they may be unknowingly violating company policies or even breaking the law.

Strategies for Preventing Maverick Spend

There are several strategies organizations can use to prevent maverick spend. These include establishing clear policies, automating the procurement process , improving visibility and transparency, introducing accountability, leveraging technology and utilizing spend analysis.

Establishing Clear Policies

The first step in preventing maverick spend is to establish clear policies and procedures for the procurement process. These policies should be clear, concise and easy to understand. They should also be regularly reviewed and updated as needed to ensure that they remain relevant.

In addition, these policies should be communicated clearly to all employees, so that everyone is aware of the company's procurement process and the consequences for violating it. This will help ensure that all employees understand the importance of following the official procurement process.

Automating Your Procurement Process

Automating the procurement process can help to ensure that all purchases are made in compliance with company policies and procedures, as well as any applicable laws and regulations.

Using a software system to automate procurement can also help to eliminate errors and reduce the amount of time needed to manage the process. This can improve the efficiency and accuracy of the procurement process, as well as reduce the potential for maverick spend.

Improving Visibility and Transparency

When employees have visibility into the procurement process, they are more likely to follow it. This can help to reduce the potential for unauthorized purchases.

In addition, transparency can help to ensure that all purchases are being made in compliance with company policies and procedures, as well as any applicable laws and regulations. This can help to reduce the potential for legal and compliance issues.

Introducing Accountability

By introducing a system of accountability, organizations can ensure that all employees are aware of their responsibilities when it comes to the procurement process. This can help to reduce the potential for unauthorized purchases.

Accountability also helps to ensure that all purchases are being made in compliance with company policies and procedures, as well as any applicable laws and regulations. This can help to reduce the potential for legal and compliance issues.

Leveraging Technology

By leveraging technology, organizations can ensure that all purchases are made in compliance with company policies and procedures, as well as any applicable laws and regulations.

Technology can also help to reduce the amount of time needed to manage the procurement process, as well as reduce the potential for errors. This can help to improve the efficiency and accuracy of the procurement process, as well as reduce the potential for maverick spend.

Utilizing Spend Analysis

Spend analysis is the process of analyzing an organization's spending patterns in order to identify areas of potential savings. By utilizing it, organizations can identify areas where maverick spend is occurring, and take steps to reduce it.

Conclusion

Maverick spend is an unwanted expenditure that can have serious consequences for organizations. By following a series of strategies, organizations can reduce the potential for maverick spend and improve the efficiency and accuracy of their procurement process.