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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 spend leakage?

Spend leakage is spending with suppliers that are not approved, preferred or under contract, or spending that misses agreed terms. It is usually measured as a share of indirect spend.

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What it looks like

Most leakage happens in indirect categories, where employees choose other sources instead of the contracted supplier. It also includes spend with a contracted supplier at the wrong price, missed volume discounts and rebates, and services billed outside the agreed scope.

Common causes

  • Overestimating. demand forecasts that lead to excess buying.
  • Weak budgeting. budgets that do not reflect real needs, so people work around them.
  • Poor demand management and compliance. users do not know or ignore which suppliers and contracts to use.
  • Hard buying routes. if the approved route is slow, people find another.
  • Unchecked invoices. rates and discounts not checked against the contract.

Why it matters

Leakage erodes the value procurement negotiated. A contract that took months to win delivers little if spend goes elsewhere or invoices ignore its terms. Finding and fixing leakage often returns value faster than a new sourcing event.

How Aavenir handles it

Invoiceflow checks every invoice against the signed contract, so off contract rates are caught before payment. Aavenir Atlas answers questions such as which suppliers bill above contracted rates or where discounts were missed.

Keep reading

Spend management Spend management is the practice of controlling and getting the most value from everything an organization spends with...Read more Spend analysis Spend analysis is collecting, cleaning, classifying and analyzing spend data to see what an organization buys, from whom and...Read more Savings tracking Savings tracking is monitoring the savings that procurement plans and delivers through sourcing and cost reduction work...Read more

Frequently asked questions (FAQ)

Common questions

What is the difference between spend leakage and maverick spending?

Maverick spending is buying outside agreed processes or suppliers. Spend leakage is wider: it also includes paying contracted suppliers the wrong price or missing agreed discounts. Read about maverick spending.

How do you measure spend leakage?

Compare spend with approved and contracted suppliers against total spend in a category, and compare invoice prices with contracted rates. Report both as a share of spend. Read about spend analysis.

How can you reduce spend leakage?

Make the approved route the easiest one, publish which contracts to use, require purchase orders, and check invoices against contract terms before payment. Together these close most of the gap. See Invoiceflow.

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.