Maverick spending is a prevalent issue in schools, where departments or employees make purchases outside the school’s procurement process or vendor contracts. Although it may seem inconsequential at first, it can have a detrimental effect on schools’ financial management by causing overspending, waste, and even fraud, while also straining relationships with suppliers.

There are several reasons why maverick spending occurs, and it is essential to understand these reasons to prevent it from happening:

1. One of the typical reasons for maverick spending is when staff members believe they have found something better. They may try to source suppliers themselves and purchase off-contract because they believe it is cheaper and can save the company money. However, this type of spending may lead to problems such as poor-quality products or services, missing documentation, and increased risk of fraud.
2. Another reason for maverick spending is cumbersome and hard-to-remember approval processes. If organisations do not have a procurement system in place, several approval processes are usually put in place to improve the efficiency of purchases. However, if staff find it hard to remember these processes or to retrieve approvals for their purchases, then maverick spending will happen more often.
3. Multiple high-mix, high-frequency purchases can also lead to maverick spending. Schools tend to purchase a wide variety of items frequently. When there are purchases required that are not part of contracts or may be needed urgently, staff may turn to maverick spending. However, this type of spending can lead to duplicate purchases, overspending, and difficulties in managing inventory.
4. Ignorance is another factor that can contribute to maverick spending. If contracts are not visible to staff, they may not be aware of these contracts and purchase items independently. It is essential to ensure that contracts are easily accessible, and staff are aware of them to prevent maverick spending.

How to Prevent Maverick Spending?

To prevent maverick spending from happening, it’s important for organisations to implement better spend management practices. Here are some strategies that can help organisations to prevent maverick spending and improve their overall financial management:

1. Educate the Staff
   To ensure a seamless transition, it is essential to educate staff about the implications of maverick spending in procurement. TenderBoard is aware of this need and provides vendor trainings to equip employees with the necessary knowledge, enabling them to make informed decisions and contribute to a smoother procurement process.
2. Create Processes for Special Purchases
   TenderBoard offers a flexible system that accommodates special purchases within the organisation. You can create a process to guide staff when required supplies are not part of contracts or needed urgently. This helps staff find approved alternative vendors, rather than resorting to off-contract spending.
3. Adopt Procurement Tools and Systems
   Procurement tools that guide purchases through approval processes can help to prevent maverick spending. TenderBoard offers comprehensive Source-to-Pay (S2P) capabilities, empowering users to effortlessly source suppliers and seamlessly integrate with third-party systems, enabling smooth and efficient transfer of information.
4. Ensure Vendors Work Together
   Organisations must involve vendors in developing tools that fit their workflows and processes, promoting proper usage of approval channels. TenderBoard has already integrated with several accounting and ERP systems to ensure workflows and information are passed through the systems and departments easily.

Conclusion

In conclusion, TenderBoard e-Procurement system is the ultimate solution to reduce maverick spending in procurement. It proactively addresses challenges linked to rogue spending and provides vendor training for well-informed purchasing decisions. TenderBoard’s flexibility transparently manages special purchases, while its Source-to-Pay (S2P) capabilities streamline supplier sourcing and integration with third-party systems. The seamless integration with accounting and ERP systems ensures efficient workflows and information exchange. Embrace TenderBoard to minimise maverick spending, optimise procurement processes, and gain control over expenditures.