If you work in procurement, you're familiar with maverick spend and the detriment it can have on your bottom line. Rouge spending creates more work, exposes the business to risk, and thwarts compliance efforts.

This article will go over how to start controlling maverick spend in a way that makes sense for your organization. We'll cover:

  • The problems maverick spend can cause within an organization
  • Why maverick spending takes place
  • Strategies for controlling maverick spend
  • Benefits of reducing maverick spend

We'll also explore how working with a group purchasing organization is a feasible strategy for reducing maverick spend.

But first, a short lesson in Texan history.

The origin of the maverick

The term "maverick" came to be thanks to a successful land baron named Samuel Maverick. Born in 1803, people recognized him for his independent spirit and willingness to defy the norm. Famously, he left his cattle unbranded which came to be called "mavericks." This legacy of boldness and non-conformity made the term synonymous with anyone who challenged the status quo.

In procurement parlance, however, maverick takes on a different meaning. Maverick spend refers to purchases made outside established procurement guidelines, often without employees even realizing the impact. Just as Samuel Maverick shook things up in his time, maverick spending can create chaos. It impacts an organization’s financial health, exposing it to various risks, and undermines cost-saving initiatives.

The problems with maverick spend

Maverick spend can cause a bunch of headaches for procurement teams:

  1. More Work: Unapproved purchases lead to messy invoices and payments, making accounting a pain.
  2. Fraud Risks: Without proper oversight, there’s a higher chance of shady dealings happening.
  3. Compliance Problems: Going off-script can break contracts or health and safety rules.
  4. Money Loss: Companies can lose out on millions each year because these purchases often skip negotiated discounts and contracts. This totally undermines all the hard work procurement does.
  5. Wasted Time: Time spent chasing down mavericks could be better used on more important projects.
  6. Hidden Data: Maverick purchases usually happen outside your e-Procurement platform. This means you won’t capture the important spend data for things purchased in-person, by phone or via email.

Plus, maverick spending can mess with sustainability goals. Take, for example, a company that is trying to avoid palm oil. If an employee orders from an unapproved supplier that still uses it, any sustainability efforts goes down the drain.

Causes of maverick spend

Maverick spending usually happens for one of these three reasons:

  1. Not Knowing the Rules: Employees may not realize there are procurement policies in place or understand why using approved suppliers is a good idea.
  2. Thinking It’s Easier: Some may think they can score better deals or get stuff faster if they skip the approved channels.
  3. Too Complicated: If the e-Procurement system is a hassle, employees might just decide to go around it altogether.

Strategies to control maverick spend

Consider the following strategies to get a handle on maverick spending:

  1. Invest in e-Procurement Systems: Having a central system for managing purchases can reduce maverick spending. Getting a system set up can be tricky (and pricey), but it keeps everyone on track and, in the end, makes buying easier.
  2. Clarify Responsibilities: Don’t just assume employees will follow contracts. Make it clear who’s responsible for managing those contracts.
  3. Define Purchasing Roles: Set clear rules about who can buy what. If everyone can make purchases without checks, maverick spending is likely to go up. Use your procurement system to set limits to help with this.
  4. Tailor P2P Processes: Different departments have different needs. Make sure your processes and procurement strategies can adapt to those differences.
  5. Enforce Purchase Orders: Consider implementing a strict “no purchase order, no pay” policy.
  6. Educate Employees: Hold training sessions to highlight why procurement policies matter. Employees often don’t realize that even small purchases can impact the bottom line.
  7. Monitor Compliance: Keep an eye on how well everyone is following procurement policies. Tackle any maverick spending issues as soon as they pop up.
  8. Listen to your Mavericks: Ask serial mavericks why they refuse to follow policy. Do they understand the bigger picture? Are your purchasing processes too slow or too complicated? Have discussions to get to the root of the issue.

Benefits of reducing maverick spend

Cutting back on maverick spending isn’t just about saving money - it comes with several other perks, too:

  1. Increased Cost Savings: When teams manage procurement well, they can easily see how those savings impact the company’s bottom line.
  2. Better Supplier Relationships: Sticking to procurement policies helps build stronger ties with preferred suppliers, who are more likely to offer better deals.
  3. Less Risk: Keeping maverick spending in check reduces risks related to operations, supply issues, and reputation.
  4. Better Spend Management Insights: Tracking data from every purchase gives a clear view of spending, allows for smarter analysis, and informs decision-making.
  5. Helps Sustainability Goals: Following procurement policies consistently supports your commitment to sustainable practices.

Group purchasing organizations (GPOs) can help

Group purchasing organizations like Una can help you tackle maverick spend.

Having a GPO relationship in place reduces maverick spend by removing the need for stakeholders to choose between suppliers. For example, a single supplier for office stationery centralizes spending in this category. Your team will no longer scatter it across dozens of unauthorized suppliers. Una drives purchasing compliance by providing explicit instructions to your buyers on how to utilize contracts.

We act as advisors, helping you streamline and close the gaps in your procurement process. Removing complexity will also aide in improving procurement compliance and reducing rogue spending.

With smart strategies and routine education in place, you're on your way to controlling maverick spend. These tools will transform those wild spenders into responsible contributors in no time.

Want to learn more about how GPOs work to reduce risk? Download a free copy of our popular playbook:

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