Tail Spend refers to all the unmanaged transactions that take place within an organisation. It involves small value or invisible purchases that an organisation makes outside of their contracts with their core suppliers and often outside of the awareness of the procurement team. Even though each of these purchases may not seem like a lot, they can add up to a huge amount of money. It could be millions of dollars spread out across many different suppliers. Surprisingly, companies often pay little attention to this when trying to save money on their purchases. Furthermore, tail spend includes more than just small expenses; sometimes, it involves bigger purchases that departments make to quickly fulfil a specific need in the business. The problem is that mishandling this tail spend can cause headaches for the procurement, finance, and warehouse teams. They might need help to match paperwork, track when things arrive, and figure out who’s responsible for the purchase. Another issue is that buying things outside of the usual contracts can put the company at risk of violating regulations and potentially engaging in fraudulent activities. It’s crucial to understand and manage this type of spending properly, as doing so can save money and ensure everything runs smoothly in the company.

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