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Aavenir Atlas early access is open Contractflow on the ServiceNow Store since 2019 Runs on ServiceNow, or standalone ProcureTech100 2025/26 Pioneering Digital Solution ISO/IEC 27001:2022 certified, SOC 2 Type 2 compliant

Glossary

What is indirect spend in procurement?

Indirect spend is money spent on goods and services that keep a business running, such as supplies, software and facilities, but do not go into its products.

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Examples of indirect spend

  • Office supplies, stationery and furniture
  • Software, telecoms and IT services
  • Facilities, cleaning, maintenance and utilities
  • Marketing, travel and events
  • Consulting, legal and staffing services

These purchases are still essential, but they do not feed directly into what customers buy. They support the process that turns direct spend into finished goods and services.

Why it is hard to control

Indirect spend is spread across many departments, cost centers and small suppliers, and individual purchases look minor. Much of it happens outside formal procurement, which makes it a common source of maverick spending and missed discounts. Services and software subscriptions also renew quietly if nobody watches the dates.

How Aavenir handles it

Contractflow puts indirect contracts such as software and services on one record with renewal tracking, and Invoiceflow checks their invoices against the agreed rates. Aavenir Atlas helps find overlapping suppliers across the portfolio.

Example

A manufacturer's steel and components are direct spend. Its cleaning contract, laptops, accounting software and travel are indirect spend, spread across many teams and suppliers.

Keep reading

Indirect procurement Indirect procurement is buying what a business needs to run, such as facilities, utilities, staffing, software and office supplies, rather than to make its products.Read more Direct spend Direct spend is money spent on the materials, components and services that go straight into the products a business sells, and it forms part of cost of goods sold.Read more Maverick spending Maverick spending is buying outside agreed procurement policy, such as from non preferred suppliers or off contract, which loses negotiated savings and adds risk.Read more

Frequently asked questions (FAQ)

Common questions

What is the difference between direct and indirect spend?

Direct spend buys what goes into the product. Indirect spend buys what keeps the business running, such as services, software and facilities. Indirect spend is often spread more widely. Read about direct spend.

How can companies reduce indirect spend?

Map where it goes, consolidate suppliers, put contracts in place for recurring purchases, make the approved buying route easy and track renewals of subscriptions and services. Read about indirect procurement.

Why do software and services need close watching?

They often renew automatically and charge by usage or seats. Without tracking, renewals happen on old terms and invoices drift from what was agreed. Track the notice dates. See Contractflow.

Have a question we have not answered? Ask the Expert

Schedule a demo

See your contracts run on one record.

  • 1 A 30 minute walkthrough Built around your team, whether that is procurement, legal, IT or finance.
  • 2 Your contracts, not ours Bring a few sample agreements and watch Aavenir AI extract and review them.
  • 3 ServiceNow or standalone We show the deployment that fits the systems you already run.

Prefer to talk first? Contact the team.