Three Tips to Curtail Maverick Spending
In some companies, Maverick spending can account for up to 80% of purchases made. That’s 8 out of every 10 purchases that don’t line up with purchasing rules established by corporate procedures. If this goes on unchecked, the company is going to lose money, and the purchase-to-pay (P2P) cycle will become harder and harder to manage. Luckily, there are solutions to help CFOs get a handle on their company’s spend and curtail Maverick purchases.
If every employee can make purchases independently, it is almost impossible to cut-down on Maverick spending. The more people involved in purchasing, the easier it is for someone to ignore or overlook defined procurement procedures, or just make a mistake and purchase items that don’t line up with negotiated purchasing terms.
You can drastically cut down on Maverick spending by designating certain employees as “operational purchasers” – people who can generate a purchase order on behalf of the other employees submitting purchase requisition requests for specific items. If they are the only ones with the authority to make a purchase, then it is easier for them to ensure purchases comply with company regulations. You usually don’t even have to hire additional employees to implement this part of a new system.
Set Up A System
Automated Procurement software can make it much easier to keep track of spending and streamline purchasing requests. A key step in stopping Maverick spending is making sure there’s a purchase order for each request, and matching that purchase order to the associated invoice and receipt. The NextProcess Purchase Order Module provides immediate insight into your spend and helps enforce company policy.
Our purchase order software is highly flexible so you can tailor it for different types of purchases. You can create variable approval structures for various types of POs or items, and limit employee purchases company-wide or to specific items per vendor. The system updates in real-time so that you can get up-to-the-minute reports on your spend.
Make Policy Clear
If you are going to take responsibility for curtailing Maverick spending in your company, you have to be ready to make the new policies clear and easy to follow. Your new system will not be effective if people do not understand what’s going on or if no one is in charge of making sure the new system works smoothly.
The easiest way for an employee to buy something is to do it themselves. If you want to stop this, you’ll have to make the purchasing guidelines easy to follow and make sure everyone knows about them. Good communication is essential to establishing an efficient purchasing system. Continue to monitor spending every month to catch Maverick purchases, and then address each case of uncontrolled spending directly.
Cutting back on Maverick spending will not happen overnight, but with these three steps and help from NextProcess automated procurement software, you’ll be a lot closer to saving money and keeping purchases within company guidelines.