Spend Responsibly.

Most spend management problems don’t start in procurement. They start earlier — at the point where someone needs something, has a deadline, and is trying to take the fastest path to “yes.”

In many organizations, that path isn’t clear. There’s no consistent place to submit a request, no standard way to attach context like budget, vendor details, or urgency, and no reliable workflow for who needs to approve what. As organizations grow, procurement becomes more than purchasing — it becomes the system that controls how spend flows through the business.

At a small scale, informal workarounds are manageable. But as the organization grows, they create blind spots: spend gets approved without the right context, purchases occur outside policy, and finance only sees the full impact after the fact. This is where spend management breaks down — not because teams don’t care, but because the systems simply can’t keep up.

What is spend management in procurement?

Spend management in procurement is a subset of broader spend management focused on  controlling, tracking, and improving company spending before funds are spent, using standardized intake, approval workflows, purchasing controls, and real-time visibility into budgets and spend activity.

The goal: increase spend under management (SUM)

If you want one metric that tells you whether your spend management process is working, it’s this: spend under management.

What is spend under management?

Spend under management (SUM) measures how much of your company’s total spend flows through an approved purchasing workflow—meaning it’s visible, categorized, and tied to policy and budget. The higher your SUM, the less unmanaged or “maverick spending” you’re forced to deal with downstream.

Many of the biggest benefits of spend management—fewer invoice exceptions, stronger compliance, and better budget predictability — come from improving spend under management.

The best practices below are designed to improve SUM by strengthening the system that controls spend at the source.

Best practice 1: Standardize intake and approvals

Spend management doesn’t improve because finance gets better at reporting. It improves when the front door to spending is consistent.

When requests enter the organization through multiple channels, it becomes difficult to apply approval rules, budget checks, and documentation consistently, and the result is predictable: spend is committed before anyone has the full context.

What “standardized intake” means in procurement

Standardizing intake means every purchase starts in the same place, includes the same minimum information, and follows the same approval rules — regardless of who’s buying or what department they sit in.

In practice, that usually means:

• A single way to submit a request
• Clear approval thresholds
• Budget context included at the point of approval
• Documentation that makes the purchase easy to audit later

What this looks like inside a real company

A standardized intake process doesn’t need to be complicated, but it does need to be consistent.

A good purchase request workflow typically captures:

• What’s being purchased and why
• The vendor (or whether one needs to be selected)
• The cost and payment method
• The budget or cost center it should be charged to
• Who needs to approve it based on thresholds
• Urgency or delivery timelines so procurement can prioritize

This level of structure reduces rework and prevents common breakdowns, like duplicate requests, invoice exceptions, and approvals made without anyone knowing which budget is being impacted.

Best practice 2: Centralize procurement workflows end-to-end

Spend management becomes more difficult when purchasing occurs in one place, receiving in another, and invoices arrive elsewhere entirely.

Even with strong intake, control breaks down when the workflow stops after approval. Procurement loses visibility, finance loses context, and mismatches turn into exceptions that take hours to untangle.

Centralizing purchasing workflows means connecting the full lifecycle:

request → approval → purchase order → receipt → invoice → payment

This is the core of the procure-to-pay process, connecting requests, approvals, purchasing, receiving, and invoicing so spend doesn’t lose context along the way.

What “centralized workflows” mean in procurement

Centralization doesn’t mean forcing everyone into a rigid process. It means creating one connected system of record so every transaction can be tracked from request through payment.

In practice, that usually includes:

• Purchase orders created from approved requests
• Vendor and catalog controls to reduce off-contract purchasing
• Receiving documentation tied to the PO
• Invoice matching (two-way or three-way) to prevent rework
• A consistent audit trail across every step

What this looks like inside a real company

In a centralized workflow, finance doesn’t have to chase down context after the fact because it’s already attached to the transaction.

When an invoice arrives, the team can see:

• What was requested
• Who approved it
• What budget it was tied to
• Whether it was received
• And whether the invoice matches what was expected

That reduces the most common breakdowns that slow purchasing down: missing receipts, mismatched invoices, duplicate payments, and unclear accountability.

It also supports scale. As purchasing volume increases, centralized workflows prevent procurement from becoming a manual coordination role and give finance visibility into spend in progress, not just spend already booked.

Best practice 3: Build real-time spend visibility in procurement

Spend visibility isn’t useful if it shows up after the month closes.

In spreadsheet-based environments, trends become clear too late: budgets are updated after purchases occur, overspend is discovered retroactively, and procurement is forced to manage spend through cleanup rather than control.

Real-time visibility changes the timing of decision-making. It provides procurement and finance with the information they need while a purchase is still in motion—when action is still possible.

What “real-time visibility” means in procurement

Real-time visibility means seeing spend commitments, budget consumption, and purchasing activity as it happens—not after invoices are processed.

In practice, that usually includes:

• Spend by department, vendor, and category (with consistent coding)
• Budget visibility at the point of request and approval
• Alerts for threshold breaches or unusual purchasing patterns
• Visibility into approval bottlenecks and cycle times
• Policy compliance insights (what’s being purchased outside preferred workflows)

What this looks like inside a real company

When visibility is built into the purchasing workflow, finance teams don’t need to wait until month-end to understand what changed.

They can identify issues earlier, like:

• Vendor costs trending up over time
• Teams repeatedly exceeding category budgets
• Recurring purchases that should be standardized or negotiated
• Purchases being approved without the right documentation
• Approval delays that are creating backlogs and workarounds

The result is fewer surprises — and better control without tightening the rules. Visibility makes spend management less reactive, allowing procurement and finance to intervene before spend becomes irreversible.

KPIs that show procurement spend management is working

Best practices only matter if they change outcomes. The easiest way to tell whether your spend management process is improving is to track a small set of metrics that reflect both control and efficiency.

Benchmarking and tracking these KPIs in the P2P process is especially useful for procurement teams because they measure what’s happening before spend hits the ledger and identify where breakdowns tend to occur.

Spend under management (SUM)

Spend under management measures the percentage of your total spend flowing through an approved purchasing workflow. It’s one of the clearest indicators of control: the higher your SUM, the less spend is happening outside policy and without visibility.

Approval cycle time

Purchase Approval cycle time tracks how long it takes for a request to move from submission to approval. If cycle times are high, it usually means approvals aren’t structured or routed consistently — and teams are more likely to bypass the process.

Budget variance (in real time)

Budget variance measures whether departments and cost centers are trending over budget before spend happens. This is especially important for procurement spend management because it indicates whether budget checks occur at the right stage—during intake and approval, not after invoices arrive.

Policy compliance rate

Policy compliance measures how often purchases comply with required approval and documentation rules. A low compliance rate is usually a process issue, not a behavior issue: it often signals unclear workflows, missing controls, or policies that are difficult to follow in practice.

Invoice exception rate

Invoice exception rate measures the percentage of invoices that require rework due to missing purchase orders, mismatched amounts, missing receipts, or unclear approvals. Exception rates are one of the best signals of workflow health — because when intake, purchasing, and receiving are connected, invoice matching becomes significantly faster and cleaner.

Estimate your Spend Under Management impact

Most teams know spend is slipping through the cracks, they just don’t know how much it’s costing them. Use the ROI calculator to estimate the impact of increasing spend under management and improving approvals, compliance, and invoice processing.