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Maverick Spend: Causes, Risks & Mitigation Strategies
Learn what maverick spend is, why it happens, and how to combat it with effective procurement strategies.
Although digital procurement solutions have been on the rise for the last decade, there’s still one thing that plagues every company’s purchasing process—and it’s called maverick spend. According to the American Productivity & Quality Center (APQC), maverick buying accounted for 1.8% of the organizations’ annual purchase value in 2021 and 2022. Although this number might not seem significant, money talks: businesses with a median total of $1 billion in purchases spend approximately $18 million annually on maverick buying.
Most such purchases are completely ad-hoc and are not budgeted for. They can potentially lead companies to miss out on saving opportunities, risk reputational damage, and stray further away from ESG and sustainability goals.
In this article, we’ll go over the maverick spending meaning, its root causes, and the key areas of procurement it impacts. Most importantly, you’ll learn strategies to eliminate rogue buying.
Scroll down to find out:
Maverick Spending Definitions and Examples
Identifying Forms of Rogue Spend
Maverick Spend vs. Tail Spend
What Causes Maverick Spend
Maverick Spend in Indirect Procurement
Risks and Dangers of Maverick Spend
5 Steps to Curb Rogue Spend
Frequently Asked Questions
Maverick Spending Definition and Examples
Maverick spend includes any purchases made outside previously defined procurement processes and policies, including established contract relations, budget planning, and buying channels. You might have heard of this concept called rogue spend, ghost spend, or even dark spend. All of these terms essentially convey that these expenses are uncontrolled, untraceable, and might even go unnoticed by the responsible procurement teams.
So, what is maverick spending? Some of the examples include the use of an unapproved supplier instead of an established contact. An employee might purchase office stationery from a retail store near their office instead of a supplier with whom the company has a contract. Thanks to a long-term agreement, the company can buy supplies in bulk at a discounted price, while the retail store offers the same goods at a higher rate. If such maverick purchases occur several times a month, they can quickly add up and lead to significant cost losses and budget misuse.
Maverick spending is not only the bane of inventory management—it might also affect hiring processes at the company. Let’s imagine a scenario where an organization wants to redesign its branding, including its logo and product packaging. To do this, the brand manager hires a freelance graphic designer—after all, it’s a one-time project that doesn’t require further collaboration.
The brand manager doesn’t notify the procurement team of their decision or check previous contacts who worked for the company. Because of these mishaps, this entire situation falls into maverick spend since it doesn’t align with the procurement policies at the company. By not contacting past contractors, the person responsible made the company miss out on potential discounts and deals. Additionally, not notifying the procurement management might cause budgeting issues.
Identifying Forms of Rogue Spend
Although maverick spending meaning might seem straightforward as a purchase outside the procurement scope, it comes in several forms and types. There are five common forms of rogue buying:
- Maverick spend caused by a lack of knowledge about existing contract relations. It’s one of the most common reasons for rogue buying in indirect spend. Because of the high-volume nature of indirect procurement, getting information about established contracts is often time-consuming and cumbersome.
- Maverick spend caused by a lack of available materials at the existing supplier. If trusted vendors don’t have the needed supplies in stock, dedicated employees might choose a different supplier without discussing it with the procurement team.
- Maverick spend caused by a lack of motivation to use the current purchasing framework. Suppose employees weren’t properly trained to use the company’s preferred platform. In that case, they might struggle to use it daily and switch to a different, more familiar system.
- Maverick spend caused by lower prices of goods or services from a different supplier. An employee might come across a vendor offering a similar product at a better price and with more flexible terms. Although it seems like a great deal, some buyers have a limited understanding of the total cost of ownership. The product may seem cheaper at first but can cost more in the long run due to maintenance, repair, or subscription fees. Purchases from unapproved vendors also come with a new set of risks, such as discount savings loss, compliance issues, and fraud risks.
- Maverick spend driven by personal gain from choosing an alternative supplier or platform. In some cases, employees decide to bypass established procurement policies to favor suppliers they have a personal relationship with. Some vendors or services offer commissions or kickbacks to those who send business their way.
Additionally, rogue expenses are often categorized by the level of control and awareness in the procurement process. While some transactions happen without any prior notice, others could have been discussed, which makes them slightly easier to track. The main types include:
- Uncontrolled and unknown. This purchase carries the highest risks since the procurement management only discovers it after the fact. For example, the team receives an invoice from an unapproved vendor the company has no contract relations with.
- Semi-controlled and semi-known. The procurement manager receives an invoice from an existing vendor. However, there are several missing elements, such as an incomplete contract, no purchase order, or no clearly defined terms and conditions.
- Semi-controlled and entirely known. This type mainly concerns vendors that are not actively managed. The company has existing contracts with such suppliers, and purchase orders and quotes have been issued, but the procurement team hasn’t negotiated fixed prices for goods. While the practice complies with procurement processes, this approach is inefficient from a cost-saving perspective.
Maverick Spend vs. Tail Spend
The terms “maverick spend” and “tail spend” might sometimes be confused and even used interchangeably, but it’s important to draw a distinction between the two.
Maverick spend refers to unregulated or unauthorized spending that wasn’t planned or controlled as part of the standard procurement cycle. Tail spend relies on the 80/20 rule, also known as the Pareto principle, where 80% of transactions make up 20% of the total spend.
Purchases falling under tail spend are mostly small, unpredictable, one-time, and often involve unapproved vendors. Examples include printer ink, last-minute travel bookings, cables, and adapters. Because these transactions are not always closely managed, maverick spend is much more likely to happen in tail spend.
To understand the difference between maverick spend and tail spend, let’s examine two scenarios:
- The office printer runs out of printer ink, and there are no spare cartridges left in the company’s inventory. An employee has to submit an urgent report in paper form, so they go to the nearby store and buy the ink there with their personal card. This falls into maverick spend since the employee ignores established company protocols and purchases from an unapproved vendor.
- The company purchases batches of printer ink from several suppliers every few months. The quantity usually varies, and the purchases are not scheduled in advance. The vendors, however, have established contract agreements with the company and offer discounts. While these purchases are still within the organization’s procurement scope, they are unplanned, irregular, and fall into the tail spend category.
What Causes Maverick Spend
A combination of multiple factors, such as unclear procurement policies, decentralized processes, and even the personal purchasing behavior of employees, lead to maverick spending. Identifying the reasons behind each rogue expense is crucial as it can help pinpoint potential gaps in the company’s procurement system. There are various factors contributing to maverick spending, but some of the most common causes include:
Complex Procurement Processes
Some procurement strategies, especially during the onboarding phase of procurement software, can feel complicated and challenging to implement. Others still rely on manual processes with multiple approval steps, which can take longer and are inefficient for smaller purchases. When employees find established procurement systems too complicated and time-consuming, they are more likely to resort to maverick spending as a quicker solution.
Lack of Training & Knowledge About Current Policies
When hiring new employees, it’s important to include information on established procurement standards, such as approval workflows, preferred purchasing platforms, and conflict of interest policy. Additionally, they need to know what vendor contracts are already in place and require complete training on procurement software the organization uses. The risk of maverick spending is much higher if these steps aren’t followed.
Limited Visibility Into Spend
Maverick spending is much easier to miss if the company doesn't keep track of where the money goes, who purchases which supplies, and whether the purchases align with procurement policies. Improper reporting and a lack of spend management system might lead to budget overruns and compliance issues.
Additionally, having a company-wide understanding of spending patterns helps determine whether current expenditures contribute to the set business goals. Many procurement professionals tend to agree: around 42% of experts in the field find spend alignment with business objectives a crucial part of procurement.
Decentralized Procurement
Multi-entity organizations tend to rely on decentralized procurement to make purchasing decisions quicker and more efficient. While a centralized procurement team handles company-wide contract negotiation and strategic decisions, purchasing is decentralized and left entirely in the hands of separate departments or business units. There’s no direct monitoring of their purchase patterns, which makes it easy for maverick spend to go unnoticed.
Additionally, decentralized procurement doesn’t reap the benefits of supplier consolidation that centralized procurement does. More often than not, such companies tend to rely on a higher number of suppliers, losing discounts and saving opportunities they could get with bulk buying.

Lack of Accountability in an Organization
Ambiguous roles and responsibilities increase the risk of rogue buying. When it’s unclear who is responsible for purchase approval or budget tracking, employees might think of unauthorized buying as a normal procurement practice. Additionally, if a rogue purchase comes to light and causes compliance or financial issues, a lack of clarity makes it difficult to determine who should be held accountable.
Lack of Defined Buying Channel Strategy
A buying channel refers to the process of purchasing something, which includes initial request, approval, receipt, and final payment. Although a crucial step in the procurement process, some companies overlook it. Standardization is key here since it makes the entire purchasing process more structured, easy to understand, and more cost- and time-efficient.
Poor Supplier Management
Employees might choose a different supplier if the company neglects to monitor supplier performance, fails to negotiate fixed prices on goods and services, or doesn't draw up a clear formal agreement. The reasons vary: some go for a better price, while others pick vendors they personally trust.
However, this significantly increases the risk of compliance issues if the supplier faces any legal allegations or delivers low-quality products. Contract management is also crucial—if the company forgets to renew the contract with a high-priority vendor, they might unexpectedly find themselves short of vital services.
Maverick Spend in Indirect Procurement
Difficult to manage, maverick spending is especially common in indirect procurement (purchases meant to support the day-to-day operations of the company). The main reasons for this include:
- Contrary to direct procurement, which involves limited, high-dollar transactions revolving around product manufacturing, indirect spend often consists of a high volume of low-cost purchases. They are scattered across multiple categories and are harder to track if the company doesn’t have a standardized protocol in place.
- Around 55% of organizations use a decentralized procurement structure to buy indirect materials and supplies. This approach helps each entity or department make purchasing more efficient and flexible without the need for further approval. However, decentralized procurement can disrupt the company-wide procurement strategy, leading to increased maverick spending.
- Companies tend to think of indirect spend as ad-hoc and dismiss it as minor and inconvenient. After all, it frequently includes urgent, one-time expenses, such as travel fees, hotel bookings, repair management, etc. Ad-hoc purchasing often requires quick solutions, which might lead to employees choosing off-contract suppliers or using unregulated platforms. These seemingly unimportant decisions quickly add up, drain the budget, and set the organization a step back from its financial goals.
Risks and Dangers of Maverick Spend
When unregulated purchases occur repeatedly, they can negatively impact business operations throughout the entire company and its different entities. Crucial areas that drive business growth, such as cost control, supplier management, and quality control, suffer from maverick spending. It’s essential to recognize the potential consequences of continued rogue buying, which include:
Budget Overruns
Maverick spend is one of the main culprits behind companies stepping outside of their budget constraints. Employees might buy a service for a higher price or even order the same supplies from different vendors multiple times without discussing the purchase with the procurement supervisors. This results in higher expenses for the company, which could have been easily avoided with more control and prior approval.
Loss of Potential Savings
While focusing on past expenses and tracking spend patterns is important, companies should recognize the saving opportunities they lose by not eliminating maverick spend. According to PwC, sticking to purchases from preferred approved suppliers can lead to 30-40% of savings in indirect spend. With long-term vendor contracts, you can negotiate fixed prices and discounts on bulk orders, secure faster and priority delivery, and, most importantly, drive savings.
Setbacks to ESG Goals
Environmental, social, and governance (ESG) objectives have become a competitive advantage in the current landscape, with companies focusing on more sustainable approaches to generate revenue. Businesses try to reduce their carbon footprint and source suppliers with sustainable manufacturing and clear employee welfare policies.
ESG completely transformed the financial reporting and disclosure standards, requiring full transparency and accountability from companies worldwide. Maverick spend stands in the way of meeting ESG goals since unintentional slip-ups, such as a purchase from an unethical supplier, might undermine the company’s sustainability efforts.
Wasted Time Resources
Uncontrolled expenses can easily go unnoticed, skewing the financial reporting and putting more workload on the procurement team. Additionally, the pre-negotiated buying channels are more efficient to use than outside vendors. When employees buy from unapproved suppliers, they spend more time researching and purchasing the supplies than they would by simply turning to a trusted contact.
If the company manages procurement with manual tools, like spreadsheets and paper-based reports, it has to grapple with delays, lost data, and costly mistakes. Procurement software like Precoro speeds up purchasing with a centralized platform that integrates with accounting and ERP tools.
Lack of Quality Control & Decreased Customer Satisfaction
Another risk with unapproved vendors is the potential decline in service quality. Suppliers with a long-standing contract agreement with the business not only have proven the quality of their goods but are also bound to maintain it. Unless procurement management checks and approves the unauthorized vendor, there’s no way to guarantee that their services are up to the company standards. This could lead to dissatisfied customers who lose trust in the company after receiving subpar products.
Contract Violations
Breach of contract is a very tangible risk when it comes to maverick buying. Many contract terms include penalties and fees for not following through with the negotiated volume commitments, which can result in significant financial losses and legal disputes for the company. On a more interpersonal level, regular maverick spend might lead to strained partnerships with vendors, who may find the company untrustworthy after it fails to adhere to the contract terms.
Reputational Damage
While most of the risks associated with maverick spend are internal, rogue spend together with the factors mentioned above can cause the downfall of the company’s reputation. Loss of trust from vendors, diminishing product quality, and unsustainable practices create a fiery concoction, which can devastate the image of the organization, taking years to rebuild.

5 Steps to Curb Rogue Spend
According to KPMG, approximately 38% of businesses find that eliminating maverick spending is a number one priority. No wonder—not only does it impact the company financially, it also disrupts day-to-day operations and weakens long-standing partnerships. To address the issue and ensure it won’t happen again, companies can develop a dual strategy, focusing on both removing current maverick spending and preventing future risks. Here are a few steps you can follow:
Step 1. Leverage Spend Analysis Data to Identify Maverick Spend
A crucial part of procurement analytics, spend analysis is often recommended by procurement experts as a first step in combating non-compliant spending. By performing spend analysis, the companies can identify repeated spending patterns that don’t align with their business goals and needs.
An in-depth examination of expenses might shed some light on the root cause of maverick spending and even give an idea of how to combat it. To perform spend analysis, follow this set of steps:
- Define the purpose of the analysis. To identify maverick spending, focus on signs like one-time payments, invoices from off-contract vendors, or reimbursement requests.
- Set key performance indicators (KPIs). The whole point of spend analysis is to help the company identify inefficiencies in the current spend management process. Set attainable goals and measure their success with such metrics as contract compliance, cost savings, cost reduction, and total spend contribution.
- Collect, clean, and categorize data. You can extract data from various sources inside and outside your business, such as ERP systems, procurement software, spreadsheets, or even paper-based documents. Split the data by department or business entity, vendor, and nature of spend. If you notice unapproved vendors, separate them into their own categories to calculate how much was spent on these transactions.
- Analyze. To identify maverick spending, companies need to put the collected data against the set KPIs and focus on unusual transactions. This might include unapproved payment methods, outside purchasing platforms, duplicate orders, and invoices from off-contract vendors. Even if the purchase was a one-off, it’s important to take note of it and develop a strategy to avoid such transactions in the future.
- Visualize the results of the analysis. Structure the findings and make them easier to comprehend by creating a visual representation as a dashboard, infographic, chart, spreadsheet, or presentation. Several tools can help you with this, including Canva, Precoro, and Power BI. For example, Precoro offers real-time data visualization and an option to create customizable reports with handy Power BI integration.
Step 2. Create a Structured Procurement Policy & Approval Workflow
One of the main culprits of rogue spending is the lack of a clear procurement policy covering different purchasing scenarios and buying channels. While standardization is helpful for future data collection, spending patterns might differ across the board. For instance, the IT department might have consistent, planned expenses, like software subscriptions and hardware upgrades.
On the other hand, the purchasing behavior of a marketing department fluctuates based on the needs of the current marketing campaign. A one-size-fits-all procurement policy with stringent approval would be ineffective for departments that operate on ad-hoc purchasing. In this case, a tailor-made procurement-to-pay process with a simplified approval workflow would motivate employees to use the company’s procurement system instead of resorting to rogue buying.
Step 3. Implement Innovative Procurement Tools
Suppose the company still relies on manual-based procurement with Excel spreadsheets, printed contracts, and unorganized inventory catalogs. In that case, employees might find purchasing outside the procurement cycle much easier (e.g., buying from a vendor they know personally or purchasing readily available materials at a nearby store).
Automated e-procurement solutions centralize all procurement-related data in one place, which makes it easier to locate and identify potential gaps. Additionally, some tools, like Precoro, offer an option to set up pre-approved vendor catalogs and flag duplicate or unapproved purchases before they happen.
Key factors to consider when choosing a procurement tool for your organization:
- Ease of use and the onboarding timeframe. First-time users of e-procurement solutions might be caught off guard and reluctant to adopt a new approach to purchase management. This is why user-friendly platforms with intuitive modules stand out in the digital procurement market. With faster implementation and shorter onboarding phases (2-8 weeks), the teams can get up and running quickly and continue working without major disruptions.
- Integration options. If your company already uses several business tools, focus on solutions that can easily integrate them into the procurement process. Platforms like Precoro seamlessly integrate with collaborative apps like Slack, data visualization tools like Power BI, and accounting software like Quickbooks or Xero.
- Customization. Being able to tailor the approval workflows and catalogs for different branches or departments is essential in combating maverick spend. Additionally, less is more—while dozens of features can be useful, it’s important to configure procurement software for the company’s specific business needs.
- Mobility. Whether it’s approving purchase requests, monitoring spending, or checking order status, the mobile version of the e-procurement tool minimizes delays and promotes faster decision-making.
- Scalability. As your company grows, your procurement needs will evolve and require a more advanced approach. Multi-entity, fast-growing organizations require a flexible solution capable of tracking high volumes of orders, complex budgets, and expanding teams across multiple locations.

Step 4. Conduct Proper Contract Handover
Lack of knowledge about the existing contract agreements and their terms is one of the root causes of maverick spending. Without a clear picture of what suppliers the company works with, employees turn to other vendors, missing out on potential discounts, free delivery, and savings.
All stakeholders, especially those directly working with inventory management, need to be aware of the existing contracts, their terms, and potential benefits. Effective contract lifecycle management strategy is the key to long-term collaborations with vendors, risk management, and cost control.
Step 5. Educate & Train All Employees on Procurement Protocols
Finally, after developing new procurement strategies, share them with all existing employees and include them in the onboarding process for new hires. Improving buyer’s knowledge is the first step to curbing unregulated purchasing. Emphasize the pitfalls of non-compliant purchasing and the hidden costs of using off-contract suppliers.
Don’t just dwell on the negatives—make sure to communicate the benefits of the company’s procurement policies. Approach it with a problem-solving mindset: while maverick spending can result in duplicate purchases, centralizing procurement data like invoices, purchase orders, and inventory reports helps mitigate it. Encourage initiative from all stakeholders and collaborate on improving procurement practices based on the specific needs of each team or department.

Driving Savings by Combating Rogue Spend
Maverick spending can quickly lead to unnecessary financial strain on the company and damage business operations in the long run. When purchases bypass approval workflows and procurement policies, whether because of convenience or personal benefits, it opens the door to major compliance risks and financial losses.
Rogue spend undermines the value of negotiated contracts, weakens established vendor partnerships, and causes the company to lose thousands in potential savings. On a bigger scale, unregulated purchasing is an obstacle on the way to sustainability and the company’s ESG goals.
Key areas of the procurement cycle are affected by off-contract purchasing, from inventory and supply management to cost control. Decentralized procurement, along with tail and indirect spending, is especially vulnerable to non-compliant purchasing due to the high volume of untraceable low-cost transactions.
However, taking control of your spending is never too late. With proactive approaches to procurement, you can ensure that every purchase aligns with your business needs. Spend analysis helps gain visibility into past and future expenditures while identifying unapproved and non-compliant purchases.
A revamped procurement policy, contract handover, and informative training are key to structuring the purchasing workflows in the company. If the business makes a switch to a procurement centralization platform, it can optimize established protocols and drive savings by gaining insight into spending patterns.
Ultimately, curbing maverick spend doesn’t stop at identifying unregulated purchases and holding buyers accountable. It requires continued efforts with the optimization of procurement processes, adoption of new technologies, and regular analysis of what worked and what didn’t.
Frequently Asked Questions
Maverick spend refers to unregulated purchases outside the organization’s procurement processes and negotiated contracts. The concept is also known as rogue, ghost, dark, and off-contract spend.
Maverick buying implies unexpected, rogue behavior—employees purchasing independently outside procurement guidelines. The term “maverick,” however, has a fascinating backstory. It originates from the surname of Samuel Maverick, a Texas lawyer and politician who refused to brand his cattle. The word was first used for unbranded animals but then gained widespread recognition as a term for someone who acts independently.
Tail spend refers to small, irregular purchases that make up around 20% of the total spend. Maverick spend, on the other hand, is unauthorized and involves unapproved purchases from off-contract vendors. If unmanaged, tail spend may be especially vulnerable to maverick spend.
Some of the potential risks of maverick spend include budget overruns, missed savings, compliance risks, reputational damage, quality issues, wasted time, and setbacks to ESG goals.
To minimize maverick buying, businesses can improve spend visibility with spend analysis, develop procurement processes with tailor-made buying strategies, and implement procurement software for data centralization and automation.