Maverick spend: What it costs and why

Your organisation negotiated rates with a preferred supplier, signed the contract and built the savings into the forecast. The spend report then tells a different story: Purchases from suppliers nobody approved, at prices nobody agreed, sitting in accounts payable alongside the numbers finance expected.

The cause is usually friction rather than intent. Off-contract buying happens when someone needs an item quickly and the approved route is slower than the alternative, and it stays invisible until the quarter closes. By that point, the negotiated savings are already gone.

For finance and procurement leaders, control rests on two levers: Visibility over where spend actually goes, and an approved route easy enough that buyers choose it by default. Both are what turn maverick spend from an end-of-quarter surprise into a cost the organisation can manage.

What is maverick spend?

Maverick spend, also called rogue spend or off-contract spend, is buying that happens outside an organisation's agreed suppliers, contracts and processes. It’s any purchase that could have gone through a negotiated arrangement but did not.

The pattern is easiest to see in a common scenario. An organisation holds a contract with a stationery and facilities supplier at agreed rates. A site manager runs short of protective gloves before a shift, cannot locate the approved supplier quickly and orders a box from the fastest available source. The order is fulfilled and the work continues, but the transaction never reaches the negotiated contract. Repeated across hundreds of small ad-hoc purchases in a year, the effect becomes material.

Maverick spend connects to two related concepts. Broader spend management is the discipline of overseeing where money goes across categories, while tail spend describes the long tail of low-value, high-frequency purchases that often escape scrutiny. Maverick buying tends to concentrate in that tail, where individual transactions appear too minor to track yet accumulate into significant leakage.

Why maverick spend happens

Maverick spend usually happens when the approved route is slower, harder to find or less convenient than the alternative. The driver is friction in the buying process, not deliberate non-compliance, which is why treating it as misconduct rarely addresses the root cause.

Several factors recur across organisations:

• Process friction in the approved route: When ordering through the agreed supplier requires a request, a purchase order and an approval cycle, buyers often find a faster alternative to keep work moving.

• Low awareness of existing contracts: A preferred supplier only delivers value when buyers know it exists, and new joiners or stretched teams often default to familiar sources.

• Poor catalogue discoverability: When the approved option is buried or a product is not listed, buyers reasonably conclude it is unavailable and look elsewhere.

• Time pressure on urgent orders: When an item is needed immediately, the fastest source tends to win and the procurement process becomes secondary.

• No visible cost signal for the buyer: The person placing the order rarely sees the negotiated rate, so an off-contract choice carries no obvious consequence at the point of purchase.

Each factor points to a buying experience that rewards the off-contract choice. Because the cause is friction rather than intent, it is something an organisation can redesign rather than police.

What maverick spend costs

The main cost of maverick spend is the negotiated saving lost when buying leaves the contract. Each off-contract purchase pays a higher price than the rate secured through strategic sourcing, and that margin difference compounds across every transaction that bypasses the agreement.

The scale is easy to underestimate. Drawing on research from The Hackett Group, the Chartered Institute of Procurement & Supply (CIPS) reports that the average company loses more than 5% of negotiated value to maverick spending. On a large indirect budget, that is a meaningful number, directly affecting cash flow and landing straight on the margin you were trying to protect.

There is a counterweight worth noting. The Hackett Group finds that its Digital World Class procurement teams see 59% less savings loss due to maverick buying, alongside 81% more indirect spend transactions requested through electronic catalogues. The implication is clear: Organisations that make the approved route the default tend to retain more of the value they negotiate.

The wider cost to the overall procurement function isn’t only financial. Off-contract buying weakens your bargaining position and supplier relationships at the next renewal, because a supplier looking at your actual volumes sees leakage rather than commitment. It also fragments the spend data you rely on to plan. Much of this leakage hides in the tail, which is why capturing tail-end spend tends to feature heavily in most procurement strategy attempting to close the gap.

Bringing spend back under control

Control typically comes from two levers working together: Visibility over where spend actually goes, and an approved route that is easy to use. One without the other rarely holds.

Visibility is the first lever. Without a clear view of off-contract purchases, an organisation cannot size the problem or act on it. In practice, this means the ability to break spend down by supplier, category and buyer, and to identify the patterns where leakage clusters. Many teams start here because it converts a vague suspicion into a measurable figure they can manage against.

The second lever is the approved route itself. Visibility shows where buying strays, but it doesn’t redirect it. What changes behaviour and strengthens contract compliance is making the approved choice the path of least resistance, so buyers reach for the agreed supplier because it’s the quicker option. Organisations often pair a clear catalogue of approved options with light-touch controls and approval workflows that guide rather than block, which can keep urgent work moving without pushing buyers off-contract.

Combining both levers can deliver considerable benefit. McKinsey reports that companies with top-quartile procurement maturity have EBITDA margins at least five percentage points higher than their less mature peers. That is an association rather than a promise, and maturity covers far more than maverick spend, but it indicates that disciplined buying and healthy margins are often linked.

Reducing maverick spend with Amazon Business

Amazon Business offers a set of solutions built around those two levers, and it can integrate with your existing ERP and procurement systems through 300+ integrations so buying data flows seamlessly into the systems you already run.

For visibility, Spend Visibility, a Prime Business feature, can help surface off-contract buying by bringing purchases together in spend analytics and dashboards. Instead of waiting for the quarter to close, it can provide a real-time view of spend by category, supplier and buyer, which may make leakage easier to identify while there is still time to act.

For steering buyers towards approved options, Guided Buying, a Prime Business feature, can help an organisation apply its own purchasing policy at the point of purchase. It can highlight preferred suppliers, flag or restrict options that sit outside policy and prompt buyers as they shop, so the approved route is the most visible one. Guided Buying applies an organisation’s own internal procurement policies and purchasing rules, not any form of regulatory compliance, and it guides buyers rather than ranking or endorsing any seller on the organisation’s behalf.

Underpinning both, broader spend management solutions can help consolidate indirect purchasing into a single, visible channel rather than scattering it across sources that are difficult to track. Consolidating buying this way may make each of the levers above more effective, though results will vary with how an organisation configures its setup and how consistently the approved route is used.

Getting ahead of off-contract spend

For finance and procurement leaders, the cost of maverick spend is the negotiated saving forfeited when buying leaves the contract, and it usually persists because the approved route is harder to use than the alternative.

Two levers help to bring it back:

1. Seeing where buying actually goes

2. Making the compliant route the easy one

While neither delivers overnight results, together they can help organisations address spend leakage continuously rather than uncovering it after the fact.

Finance and procurement leaders weighing that shift can contact Amazon Business to discuss how Spend Visibility and Guided Buying apply to their own spend.

This article was created by professional writers and editors with the assistance of AI-powered tools. AI was used in a supportive capacity only – for example, to aid with translation, content review, and alignment with brand guidelines. All substantive research, editorial decisions, and final approval were performed exclusively by human authors and editors, who retain full editorial responsibility for this publication.

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