{"id":40429,"date":"2021-12-24T04:05:26","date_gmt":"2021-12-24T09:05:26","guid":{"rendered":"https:\/\/simfoni.com\/?p=40429"},"modified":"2025-02-10T08:47:01","modified_gmt":"2025-02-10T13:47:01","slug":"5-tips-for-getting-your-tail-spend-under-control","status":"publish","type":"post","link":"https:\/\/simfoni.com\/tail-spend\/5-tips-for-getting-your-tail-spend-under-control\/","title":{"rendered":"5 Tips for Getting Your Tail Spend Under Control"},"content":{"rendered":"
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

When procurement<\/strong><\/a> professionals debate tail spend<\/span><\/a><\/strong>, they are often referring to non-strategic purchases that account for 10%-20% of an organization’s indirect spend<\/a><\/strong>.  Large global enterprise businesses often have thousands of low throughput ‘tail’ suppliers supplying low-value purchase items, from copy paper to IT software and services and practically everything in between. It is not uncommon to find that 10% of total spend is thinly distributed across 90% of vendors, which creates a costly transactional burden for both procurement<\/a> and finance. Because it’s such a daunting operational challenge to confront, tail spend<\/span><\/a> is often unmanaged by already overburdened procurement teams<\/a><\/strong>.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

In our progressively competitive and volatile global business climate, procurement professionals are under intense strain to do more with less. Although managing by triage may sometimes seem like the only way to get through the day, disregarding tail spend<\/span> ultimately costs your organization more than you might initially realize.<\/p>

Learn more:-<\/strong><\/span> On Demand Webinar – How to Gain Control and Save on your Indirect Spending<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t\t\t\t\t\t

Unaddressed tail spend<\/span> represents up to 20% of total indirect expenses<\/strong>. To put this into perception, at a corporation with $2 billion in indirect expenses, tail spend<\/span> might account for $400M. That’s a lot of money that procurement teams choose to overlook because they are too busy managing the other $1.6 billion (80%). However, the unmanaged 20% drains the organization’s resources and has a significant impact on the organizations financial performance – especially as it relates to Sales, General & Administration (SG&A) and Cost of Goods Sold (COGS)<\/span>, not to mention the overhead cost to AP to process low dollar invoices.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t