How to reduce maverick spending with a purchase order system

Procurement teams negotiate vendor contracts, secure volume discounts, and build approved supplier lists to control costs. Yet purchases still happen outside these controls every day. An employee subscribes to software on a corporate card. A department orders from an unapproved vendor. A manager contacts a supplier directly to skip a two-day approval wait.

According to The Hackett Group, organizations lose between 5% and 16% of targeted procurement savings to this kind of rogue buying. A Purchase Order (PO) system addresses the problem at its source by requiring every purchase to flow through a documented, approval-controlled workflow before any vendor commitment is made.

What is maverick spending?

Maverick spending is any purchase made outside an organization's approved procurement policies, preferred supplier lists, negotiated contracts, or formal approval workflows. Also called rogue spending or off-contract spending, it occurs when employees or departments bypass the established purchasing process and independently select vendors or commit company funds without following required controls.

Maverick spending is not necessarily fraudulent. In most cases, it happens due to urgency, lack of awareness about existing contracts, slow approval processes, or decentralized decision-making. However, the financial impact is significant. Research by the Chartered Institute of Procurement & Supply (CIPS) shows that maverick buying can account for up to 80% of all invoices, even in large organizations with dedicated procurement departments.

Common examples include:

• Purchasing software licenses on a corporate card without raising a PO
• Ordering supplies from a non-approved vendor because the preferred supplier's catalog felt inconvenient
• Engaging a freelance contractor without checking existing vendor agreements
• Creating a purchase order after goods have already been received and invoiced

Each of these bypasses the controls that protect negotiated pricing, vendor relationships, and financial visibility.

Why maverick spending happens

Understanding what drives rogue purchasing helps identify where a PO system needs to intervene. Maverick spending rarely stems from malicious intent.

The root causes are operational and structural:

• Slow or unclear approval processes. When procurement approvals take days, employees bypass the system to meet deadlines. Urgency overrides compliance.
• Limited awareness of existing contracts. Staff may not know that an approved vendor already supplies the product they need at a negotiated rate.
• Decentralized purchasing authority. Growing organizations delegate buying decisions to regional teams without standardized controls. Local teams engage vendors without procurement oversight.
• Inconvenient procurement tools. When the approved purchasing process is more complicated than emailing a vendor directly, employees choose the path of least resistance.
• Rapid hiring without procurement training. New employees follow informal team habits instead of documented procurement policies that they were never trained on.

Each cause has one thing in common: the compliant purchasing path is either too slow, too hidden, or too complicated compared to the non-compliant alternative.

For a broader look at procurement fundamentals, read our ultimate guide to purchase order management.

How a PO system stops maverick spending

A PO system prevents rogue purchasing by making the compliant path mandatory and faster than the alternative.

Here is how each control mechanism works.

Mandatory PO creation before any vendor commitment

The most effective control is the simplest: no purchase order, no purchase. When the organization requires a PO for every vendor transaction above a defined threshold, employees cannot commit company funds without entering the system. Every purchase gets a PO number, a defined vendor, agreed pricing, and a documented approval trail before any goods or services are ordered.

Rules-based approval workflows

A PO system routes purchase requests to the correct approver automatically based on configurable rules. Routing can depend on purchase value, department, cost center, vendor category, or project code. Low-value routine purchases are approved quickly through predefined thresholds. High-value or non-standard requests escalate to senior approvers. Staff no longer chase sign-offs through email because the system handles routing, reminders, and escalation automatically.

For guidance on structuring workflows, see our article on optimizing purchase order approval workflows.

Approved vendor enforcement

The PO system maintains a centralized list of approved suppliers with contracted pricing and terms. When employees create a purchase request, the system guides them toward preferred vendors. Selecting a non-approved vendor triggers an exception workflow requiring additional justification and approval. Staff see approved options first, making compliant purchasing the default behavior.

Automated invoice matching against POs

When vendor invoices arrive, the PO system matches them against the original purchase order and delivery confirmation. Invoices without a corresponding PO get flagged immediately. Pricing discrepancies trigger review before payment. Maverick purchases that bypassed the PO process cannot reach payment without detection.

For more on reconciliation, see our article on three-way matching in purchase order management.

Real-time spend visibility and reporting

A centralized PO system provides dashboards showing total spend, spend by vendor, spend by department, PO compliance rates, and off-contract purchasing in real-time. Procurement and finance teams identify maverick patterns early instead of discovering them during month-end reconciliation.

Benefits of using a PO system to control maverick spending

Implementing PO controls across the procurement process produces measurable improvements across cost management, compliance, and efficiency.

• Negotiated savings are protected. When all purchases flow through approved vendors at contracted rates, the discounts that procurement negotiated actually get used. Organizations stop losing 5% to 16% of targeted savings to off-contract buying.
• Financial visibility improves immediately. Every purchase commitment is recorded at the PO stage, giving finance teams real-time visibility into committed spend before invoices arrive. Budget forecasting becomes more accurate.
• Vendor relationships strengthen. Consolidating spend through preferred suppliers increases purchasing volume, strengthening the organization's position for future negotiations. Suppliers receive consistent, documented orders instead of fragmented requests from multiple departments.
• Audit readiness improves. A PO system creates a complete digital audit trail for every purchase: who requested it, who approved it, which vendor was selected, at what price, and when goods were received.
• Procurement teams shift from policing to strategy. When the system enforces compliance automatically, procurement staff spend less time chasing unauthorized purchases and more time on vendor strategy, contract negotiation, and cost optimization.

Challenges of implementing PO controls

Introducing mandatory PO requirements changes how every department purchases. Planning for these challenges ensures adoption succeeds.

• Employee resistance to new processes. Staff accustomed to buying directly from vendors will push back if the PO process feels slower. The system must be fast and intuitive enough that compliant purchasing is easier than the workaround.
• Approval bottlenecks slow adoption. If approval workflows involve too many layers, employees find ways around them. Configure thresholds that match purchase risk: fast-track low-value purchases and reserve multi-level approval for high-value requests.
• Incomplete vendor data creates gaps. A PO system that does not include all frequently used vendors forces employees to request exceptions constantly. Comprehensive vendor onboarding before rollout prevents this problem.
• Phased rollout prevents disruption. Implementing PO controls across every department simultaneously creates friction. Starting with high-spend departments and expanding gradually builds confidence and adoption.

Stop maverick spending with myPOmanager

MyPOmanager (Tejas Purchase Order Management System) automates the purchase order lifecycle with automatic PO generation based on business rules, vendor management, invoice management, and auto invoice generation. Flexible vendor integrations via EDI and API centralize supplier communication. The cloud-based SaaS platform offers data transparency across all procurement activity, prebuilt integration with ERP and notification systems, and a quick implementation cycle of 4 to 6 weeks.

Book a demo to see how myPOmanager brings procurement spend under control.

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