Blog · Procurement and supply chain · Procurement
The complete spend under management calculation on ten payables invoices, small enough to check by hand: each invoice's supplier, category, business unit and PO reference, the contract register's in-force agreements, the approved supplier list, the bucket per invoice, on contract, approved off contract, or unmanaged, the share by category and by unit, the uncategorised invoice that is its own finding, and the identity that the three buckets sum to total spend, so a reader can reproduce every figure and then run it on their own payables export.
Spend under management is a bucket per invoice and a sum, and on ten invoices every bucket can be assigned by hand. This page works the rules, the ten invoices, the shares by category and unit, the uncategorised line and the identity.
Contracts in force:
| Contract | Supplier | Category | Units covered |
|---|---|---|---|
| C-1 | S-10 | IT hardware | All |
| C-2 | S-20 | Professional services | Unit A |
| C-3 | S-30 | Facilities | All |
Approved suppliers, by category: S-11 (IT hardware), S-21 (professional services), S-30 (facilities). PO required for professional services and IT hardware.
On contract: supplier and category match a contract in force, and the unit is covered Approved off contract: not on contract; supplier on the approved list for the category; PO present where required Unmanaged: otherwise, or no PO where required, or no category
| Invoice | Supplier | Category | Unit | PO | Amount | Bucket | Why |
|---|---|---|---|---|---|---|---|
| 1 | S-10 | IT hardware | A | Yes | $30,000 | On contract | C-1 |
| 2 | S-11 | IT hardware | B | Yes | $12,000 | Approved | On list; PO present |
| 3 | S-12 | IT hardware | B | No | $5,000 | Unmanaged | Not on list; no PO |
| 4 | S-20 | Professional services | A | Yes | $18,000 | On contract | C-2 covers Unit A |
| 5 | S-20 | Professional services | B | Yes | $22,000 | Approved? No: not on list; C-2 does not cover B | Unmanaged |
| 6 | S-21 | Professional services | B | No | $25,000 | Unmanaged | On list, but no PO where required |
| 7 | S-22 | Professional services | A | No | $14,000 | Unmanaged | Not on list |
| 8 | S-30 | Facilities | A | Yes | $28,000 | On contract | C-3 |
| 9 | S-30 | Facilities | B | Yes | $20,000 | On contract | C-3 |
| 10 | S-40 | (none) | B | No | $10,000 | Unmanaged; uncategorised | Listed |
| Total | $184,000 |
Invoice 5: S-20 has a contract for Unit A only; Unit B's purchase from S-20 is unmanaged, which is the pattern-one case from the maverick spend guide.
| Category | Spend | On contract | Approved | Unmanaged | Under management |
|---|---|---|---|---|---|
| IT hardware | $47,000 | $30,000 | $12,000 | $5,000 | 89% |
| Professional services | $79,000 | $18,000 | $0 | $61,000 | 23% |
| Facilities | $48,000 | $48,000 | $0 | $0 | 100% |
| Uncategorised | $10,000 | $10,000 | 0% | ||
| Total | $184,000 | $96,000 | $12,000 | $76,000 | 59% |
| Unit | Spend | Under management |
|---|---|---|
| A | $90,000 | 30,000 + 18,000 + 28,000 = $76,000: 84% |
| B | $94,000 | 12,000 + 20,000 = $32,000: 34% |
Unit B routes two thirds of its spend around procurement, most of it professional services.
on contract + approved + unmanaged = 96,000 + 12,000 + 76,000 = $184,000 = total
Approved counted as contracted. Invoice 2 at list price reported as negotiated; under management unchanged but the savings claim is on the wrong base.
PO rule ignored. Invoice 6 becomes approved; professional services reads 55 percent.
Uncategorised dropped. Total reads $174,000; under management reads 62 percent.
Contract scope ignored. Invoice 5 read as on contract; Unit B's bypass invisible.
The same three rules per invoice against the register and the list, summed by category and unit. Covirage runs it on the payables export every quarter. The spend under management guide covers the measure, and the maverick spend guide covers what invoice 5 is an instance of.
Where the policy requires a purchase order and the invoice has none, procurement never saw the purchase, whatever the supplier's status. The rule is stated: no PO where one is required means unmanaged, even at an approved supplier.
Because it cannot be matched to a contract or an approved list without a category, and dropping it would flatter the figure. It is counted as unmanaged and listed separately, so the category coding gets fixed.
A claimed saving on professional services applies to the 23 percent under management. The CFO reads the bucket table before the savings figure, and the savings figure is stated on the managed spend, not the category.