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Key takeaways
- Maverick spend, also called rogue or off-contract spend, is purchasing outside approved suppliers, contracts or processes.
- The usual causes are slow processes, poor visibility of approved options and unclear policy.
- It costs you in price, risk, duplicated tools and lost control of data.
- Measure it as off-process spend divided by total spend, and track it by department.
- Fixing speed and ease of the approved route reduces it more than punishment does.
A project manager needs a design tool by Friday. The official request process takes ten days. She puts it on a company card, and the problem is solved. The tool then renews every year, three other teams buy it separately and security discovers it holds customer files.
That story is maverick spend in miniature. Nobody meant harm, and the company still ended up worse off.
What maverick spend is
Maverick spend is any purchase made outside the organization's agreed buying channels. That includes buying from a supplier that is not on the approved list, paying a price different from the contracted price, skipping the purchase order or approval, or using a personal or corporate card for something that should have gone through a contract.
Maverick spend is spending that bypasses the procurement policies, preferred suppliers or contracts the organization has set up for that purchase.
The terms rogue spend, off-contract spend and non-compliant spend are used for the same idea. Some teams distinguish off-contract spend, where a contract exists but is ignored, from unmanaged spend, where no contract exists at all.
Why it happens
- The official process is slow. If buying through the process takes days and buying outside takes minutes, people choose minutes.
- People do not know the options. They cannot find the approved supplier or catalog, so they search the web.
- The policy is unclear. Nobody knows what needs approval or from whom.
- The approved choice is worse. If the contracted supplier is expensive, slow or poor quality, people route around it.
- Cards make it easy. A corporate card removes friction without removing control, unless card spend is reported.
- Emergencies. Real urgency, with no emergency route in the policy, forces improvisation.
- Nobody checks. If spend outside policy is never reviewed, the rules become suggestions.
What it costs
- Higher prices. Contracted discounts are not applied, and small one-off buys lack negotiating leverage.
- Duplicate spend. Teams buy the same tool or service separately.
- Risk. Suppliers are not checked for security, financial health or compliance. Data may sit with a supplier nobody vetted.
- Contract exposure. Terms nobody reviewed, auto-renewals and personal liability for people who clicked "accept".
- Lost visibility. Finance cannot forecast what it cannot see.
- Missed volume commitments. If you promised a supplier a volume and it is not reached, you may lose the discount.
Measuring it
Calculate the maverick spend rate: spend outside agreed channels divided by total spend. Break it down by department, category and supplier to see where it concentrates.
Total annual spend is 8,000,000 dollars. Spend with approved suppliers under contract or purchase order is 5,900,000 dollars. The remaining 2,100,000 dollars went through cards, expense claims or unapproved suppliers. The maverick spend rate is 2.1 divided by 8, or about 26 percent. Of that 2.1 million, 40 percent sits in three departments and 25 percent in one software category. These are the places to work first.
Other useful measures are purchase order coverage, contract coverage and the number of purchase orders raised after the invoice date. See procurement KPIs.
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How to reduce it
Make the approved route faster
This one change does more than all the others. If an approved purchase takes two days and the unapproved one takes ten minutes, you will lose. Shorten forms, set approval limits so most requests need one approver and use catalogs for frequent items. See purchase requisition guide.
Make approved options easy to find
Publish a list of approved suppliers and catalogs in one place that people actually visit. A search box beats a PDF.
Write a short, clear policy
One page. Who can buy what, up to which amount, from whom. Include an emergency route. See our procurement policy guide.
Fix the contracts people avoid
Ask why. If the preferred supplier is slow or expensive, fixing that fixes the behavior. Maverick spend is often feedback about a bad contract.
Control card spend
Set category blocks and limits on cards, and review card statements monthly by category. Cards are not the problem. Unseen cards are.
Report and review
Send each department head a monthly list of their off-process spend. Awareness changes behavior faster than rules do.
Consolidate and educate
When spend analysis shows that several teams buy the same service separately, consolidate under a single contract and tell people why. See what is spend analysis.
Case in numbers: where maverick spend hides
A review of card and expense data finds 2.1 million dollars of off-process spend. By category: software and subscriptions 640,000 dollars, travel and events 520,000 dollars, marketing services 410,000 dollars, office and facilities 330,000 dollars, other 200,000 dollars. By department: marketing 38 percent, sales 24 percent, engineering 18 percent, others 20 percent.
The software number is the most useful. The review finds 61 subscriptions, 14 of them to similar products. Three have customer data in them. The team moves the 14 to a single approved tool, brings the three under security review and cuts that line by nearly a third. Travel gets a booking tool. Marketing gets a preferred agency list.
Notice the order of work: find where it concentrates, fix the biggest category with a better approved option, then address the rest.
What not to do
- Do not rely on punishment. It drives spend further out of sight.
- Do not add steps without removing others. More approval means more bypass.
- Do not treat every off-contract purchase as misconduct. Some are emergencies or sensible exceptions.
- Do not ignore small amounts. Many small purchases add up to large totals. See tail spend management.
When maverick spend is acceptable
Some off-process purchases are fine: a genuinely urgent repair, a one-off item with no suitable approved source or a small purchase under a threshold your policy permits. The aim is not zero. The aim is that exceptions are visible, justified and rare.
- Measure your maverick spend rate and where it concentrates.
- Time your approved process end to end.
- Cut the slowest step.
- Publish approved suppliers where people will see them.
- Write a one page policy with an emergency route.
- Set card limits and category blocks.
- Send monthly off-process reports to department heads.
Vocabulary worth knowing
- Off-contract spend. Spending with a supplier that has a contract, but not at the contracted terms.
- Unmanaged spend. Spending with no contract at all.
- Spend under management. Spend that follows a defined process.
- P-card. A purchasing card issued to employees for small buys.
- Compliance rate. The share of spend that follows policy.
- Shadow IT. Technology bought and used outside the IT department's knowledge.
Related reading
Measure first with what is spend analysis, then set rules with the procurement policy guide. For the small purchases that make up much of it, read tail spend management.
Frequently asked questions
What is maverick spend?
It is purchasing outside the agreed processes, suppliers or contracts of the organization, such as buying from an unapproved supplier or skipping the purchase order.
What causes maverick spend?
Slow approved processes, poor visibility of approved suppliers, unclear policies, contracts people dislike and easy card access with no review.
How do you calculate maverick spend?
Divide spend outside agreed channels by total spend. Break it down by department, category and supplier to find where it concentrates.
Is all maverick spend bad?
No. Genuine emergencies and sensible small exceptions are acceptable if they are visible and rare. The problem is systematic bypass.
How can software help reduce maverick spend?
It can make approved buying quicker through catalogs and automated approvals, and report on off-process spend. It works only when the approved route is genuinely easier.