The official business definition of indirect vs direct spend is a key concept for any organization to understand. Indirect spend is defined as any expenditure that is not directly related to the production of goods or services. This includes things like office supplies, travel expenses, and marketing materials. Direct spend, on the other hand, is any expenditure that is directly related to the production of goods or services. This includes things like raw materials, labor costs, and overhead expenses. Understanding the difference between these two types of spend is essential for any business, as it helps them to accurately allocate their resources and budget appropriately. By understanding the difference between indirect and direct spend, organizations can ensure that they are spending their money in the most efficient and effective way possible.
