Difference between revisions 564301757 and 572156580 on enwiki

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'''Spend management''' is the way in which companies control and optimize the money they spend. It involves cutting operating and other costs associated with doing business. These costs typically show up as "operating costs" or SG&A (Selling, General and Administrative) costs, but can also be found in other areas and in other members of the supply chain.

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== How spend management saves money ==

*'''Decreasing "maverick" spend''' -- "Maverick" spend is the process whereby requestors (those who are creating a request for an item or service that will be turned into an order to a supplier) buy items or services that are outside the preferred process or system. This often means that a "maverick" purchase typically results in an individual or department buying an item in an 
''ad-  hoc'' fashion that results in paying a 20% premium for that item. Instead of buying from a preferred supplier with which the company has negotiated a contract with discount pricing, an individual goes outside the normal process and purchases that same item at retail.

:This is often hard to enforce unless some control mechanism (often technological) is put in place that:
:: 1) prohibits this type of purchasing
:: 2) sets up penalties for these types of purchases
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==References==
{{Reflist}}

[[Category:Management accounting]]
[[Category:Procurement]]
[[Category:Supply chain management]]