Managing tail spend can feel like chasing shadows since it focuses on low-value purchases made outside of central procurement controls. But when ignored, these small spends add up quickly. Whether it is office supplies, last-minute vendor purchases, or overlooked one-off buys, the lack of visibility makes it harder to budget, forecast, or negotiate better deals.

By tackling tail spend properly, your business can unlock savings, reduce supplier risks, and gain tighter control over your procurement strategy. Keep reading to discover how to take control of your tail spend, and why it matters!

What Exactly Is Tail Spend?

Tail spend refers to the part of your procurement budget that covers irregular, low-value, or ad-hoc purchases. These transactions often fall outside of long-term supplier contracts and standard buying procedures. In most cases, they represent about 20% of total spending but can involve around 80% of suppliers.

The issue is that these spends are usually unmonitored, unmanaged, and scattered across departments. That opens the door to inefficiencies, duplicate purchases, maverick spending, and missed savings.

Why Tail Spend Matters More Than You Think

While individually, small purchases carry hidden costs. Processing each transaction involves time, admin effort, and compliance checks. Multiply this across thousands of transactions, and the cost to process may outweigh the value of the items bought.

Uncontrolled tail spend also increases supplier risks. Unknown vendors may lack proper due diligence, insurance, or ethical sourcing standards, potentially exposing your business to legal or reputational issues.

Most importantly, tail spend hides valuable data. Without a central record, your team cannot easily analyse patterns, monitor spending behaviour, or identify opportunities for better deals. That’s where understanding how to improve tail spend management becomes crucial.

How to Start Managing Tail Spend

You do not need to overhaul your entire procurement system to take control. Instead, follow these simple and practical steps to improve your management:

1. Audit Existing Tail Spend

Begin with a detailed review of non-contracted, low-value purchases across departments. Look for common items, repeat suppliers, and fragmented purchases that could be centralised.

2. Set Clear Spend Policies

Create simple, easy-to-follow rules for purchases below a set threshold. Encourage staff to use approved suppliers and purchasing channels. This helps reduce off-contract buying and improves compliance.

3. Use E-Procurement Tools

Digital tools that automate ordering, approval, and supplier selection help improve control. They also provide visibility over spending in real time and reduce admin work.

4. Consolidate Suppliers

Where possible, negotiate broader agreements with trusted vendors. Reducing the number of one-time suppliers simplifies management, strengthens partnerships, and may result in better prices.

5. Train Employees

Ensure staff understand the impact of unmanaged spend. Simple training or internal guides can encourage smarter buying and fewer rogue purchases.

Take Action Before It Costs You More

Ignoring tail spend means missing savings and risking poor procurement decisions. It’s often overlooked because it feels minor, but its impact can be major. With a few simple changes and the right tools, you can take control of your tail spend and boost overall procurement performance.

Review your processes today and find out what unmanaged spend might be costing your business tomorrow.