Maverick Spend: What It Is, Why It Happens and How to Reduce It
Maverick spend is buying outside the agreed process: no purchase order, an unapproved supplier or off-contract prices. Why people do it and how to bring it back.
Every business has a purchasing process on paper and a purchasing process in practice. Maverick spend is the gap between the two: the laptop bought on a personal card, the contractor engaged by email, the supplies ordered from whichever webshop delivers tomorrow. None of it is fraud, usually. It is people getting their jobs done around a process that is slower than they are.
What maverick spend is
Maverick spend (also called rogue spend or off-contract spend) is any purchase made outside the business's agreed purchasing process. It covers three different things, and it helps to keep them apart because each has a different fix:
| Type | What happens | Typical example |
|---|
| No purchase order | Goods or services are ordered without any approved commitment on record | A manager emails a supplier directly; the invoice is the first thing finance sees |
| Off-contract | A supplier with a negotiated agreement exists, but someone buys the same thing elsewhere | Office supplies from a retail webshop instead of the contracted wholesaler |
| Unapproved supplier | The supplier has never been checked or set up | A new freelancer paid on the strength of an invoice and a bank account number |
Spend that follows the process is often called compliant spend or spend under management. The rest is maverick.
Why it costs more than it looks
- Higher prices. Off-contract buying forfeits negotiated prices and volume breaks. It shows up as an unfavourable purchase price variance that nobody can trace to a decision.
- Invisible commitments. If there is no purchase order, there is nothing to check a budget against, and nothing to accrue at month end. Finance learns about the cost when the invoice arrives, which is too late to stop it and sometimes too late to book it in the right period.
- Invoices that cannot be matched. Without a purchase order and a goods receipt there is nothing to three-way match against, so the invoice is paid on trust or held while someone tries to find out who ordered it.
- Supplier risk. A supplier nobody onboarded has had no bank detail verification, no tax check and no contract terms. That is the gap invoice fraud relies on.
- Weaker negotiating position. Volume spread across many suppliers is volume you cannot use to negotiate with any of them.
Why people do it
Maverick spend is almost always a symptom, and treating it as a discipline problem rarely works. The usual causes:
- The process is slow. If an approval takes three days and the item is needed tomorrow, the item will be bought another way. This is the single biggest cause.
- The process is unclear. People do not know which supplier is preferred, what the threshold is or who approves, so they guess.
- The approved route is worse. The contracted supplier is out of stock, delivers slowly or has a clumsy ordering portal, and a retail website is two clicks away.
- Nobody notices. If an invoice without a purchase order is paid as smoothly as one with, there is no feedback that anything went wrong.
- Emergencies. Some urgent purchases are genuinely legitimate. A process with no fast path for them teaches people that the process is optional.
How to measure it
You cannot reduce what you do not count. Three measures are enough to start, all taken from data accounts payable already has:
- Share of invoices with no purchase order, by count and by value. The most direct measure, and the easiest to calculate.
- Spend with suppliers outside the approved list, as a share of total spend.
- Purchase orders raised after the invoice date, sometimes called retrospective or after-the-fact POs. They look compliant in the system but the commitment was made outside it.
Report them by department or cost centre. A company-wide percentage tells you there is a problem; a department breakdown tells you where to have the conversation. These measures also feature in our list of procurement KPIs for small businesses.
How to reduce maverick spend
1. Make the compliant route the fastest route
Approvals that route themselves by amount and approvers who can sign off from an email or a phone remove most of the reason to bypass the process. Small purchases under a threshold can be pre-approved entirely. See how to design a purchase order approval workflow people actually follow for thresholds and escalation.
2. Publish a short preferred supplier list
For the categories people buy most often, name the supplier to use and put the catalog or contract price where the requester will see it. A requester who can see that the approved option is already set up rarely goes looking for another.
3. Bring online buying into the process
A lot of modern maverick spend is webshop spend: someone fills a cart on a supplier's site and checks out with a company card. Rather than banning it, capture it. Foxpedite's Chrome extension, for example, turns the cart on a supplier's website into a draft purchase order, so the order goes through approval before anyone checks out.
4. Give emergencies a legitimate fast path
Allow an urgent purchase to be made first and the purchase order raised within a day or two, with the reason recorded. Then report how often the fast path is used and by whom. An emergency route that is visible stays an emergency route.
5. Adopt a "no PO, no pay" rule, gradually
Once the process is fast, tell suppliers that invoices must quote a purchase order number and return invoices that do not. Start with your largest suppliers, exempt categories where a purchase order genuinely makes no sense (utilities, rent, some subscriptions) and announce a date. Introduced before the process is quick, the rule creates resentment and workarounds; introduced after, it mostly confirms what people already do.
6. Check budgets when the order is raised
A budget check at the point of ordering turns an overspend into a decision someone makes, rather than a variance someone discovers. It is also the strongest reason for people to want their purchases on a purchase order: it is how their budget report stays accurate.
Common questions
Is maverick spend the same as fraud?
No. Most maverick spend is well-intentioned buying outside the process. It does create the conditions fraud depends on, such as unvetted suppliers and invoices nobody can match, which is why it matters even when every individual purchase was legitimate.
What is a normal level of maverick spend?
It varies widely by industry and by how it is measured. Rather than chase a benchmark, measure your own share of invoices without a purchase order and track it month on month. The trend tells you whether the process is working.
Is a purchase order raised after the invoice still maverick spend?
Yes, in substance. The commitment was made without approval and without a budget check; the purchase order only records it afterwards. Track these separately so they do not flatter your compliance figures.
Do employee expenses count as maverick spend?
Not when they follow the expense policy: travel, meals and small incidental costs are meant to be claimed as expenses. They become maverick spend when an expense claim is used to buy something that should have gone through purchasing, such as equipment or recurring services.
The short version
Maverick spend is buying outside the agreed process: no purchase order, an off-contract price or an unapproved supplier. It costs money through lost prices, invisible commitments and unmatched invoices. Measure it from the invoices you already have, fix the process before you enforce it, give urgent purchases a visible fast path, and only then insist on no PO, no pay.