What Is Tail Spend?

It’s easy to become overwhelmed when looking at the budget of a company. Especially if it’s a large one, with a variety of categories and line items that make up the total expenditure. And even among all those different line items, there is one in particular that can be difficult for companies to keep track of: tail spend. But what is tail spend, and why does it matter? In this blog post, we will explore the concept of tail spend and how it can affect your business. From understanding what it is to how to identify and manage it, read on to learn more about this important concept.

What is tail spend?

Tail spend is the money that a company spends on goods and services that are not essential to its operation. This includes items like office supplies, janitorial services, and computer equipment. While these items may not be necessary for a company to function, they can still add up to a significant amount of money.

Tail spend usually makes up a small percentage of a company’s overall budget, but it can still have a big impact on the bottom line. That’s because tail spend is often less efficient than core spending. For example, a company might overspend on office supplies because it doesn’t have a good system for managing its inventory. Or it might pay too much for janitorial services because it hasn’t shopped around for the best price.

To get a handle on tail spend, companies need to take a close look at their spending patterns and find ways to cut down on waste. Here are some tips:

* Set spending limits for each category of tail spend.

* Review your invoices carefully to make sure you’re not being overcharged.

* Shop around for better deals on office supplies, janitorial services, and other items.

* Take advantage of volume discounts by buying in bulk.

* Use an e-procurement system to streamline the purchasing process and get better prices from suppliers

Why is it important to manage tail spend?

Tail spend is the term for the small, everyday purchases that add up over time. Many businesses don’t bother to track or manage their tail spend, but it can have a big impact on your bottom line.

There are a few reasons why it’s important to manage your tail spend:

1. You could be overspending without realizing it.

If you’re not tracking your tail spend, you could be inadvertently spending more than you need to. By taking a closer look at your tail spend and finding ways to cut back, you can save money without making major changes to your business.

2. Tail spend can be a major source of waste.

If left unchecked, tail spend can lead to wasteful spending on things like office supplies or unnecessary services. This not only wastes money, but it also contributes to environmental waste and clutter in the workplace.

3. Managing tail spend can help improve your negotiating power.

If you have a good handle on your tail spend, you’ll be in a better position to negotiate with suppliers on price. This can help you get better deals and save money in the long run.

How can you manage tail spend?

Tail spend is the term for the small purchases that a company makes on a regular basis. While these purchases may seem insignificant, they can add up to a significant amount of money over time.

There are a few ways that you can manage tail spend:

1. Keep track of your spending. This may seem like an obvious solution, but it’s important to know where your money is going. If you’re not sure where your tail spend is going, ask your employees or look at your financial statements.

2. Set limits on tail spend. Once you know how much you’re spending on tail spend, set limits on what can be spent. This will help you keep control of your budget and avoid overspending.

3. Use purchase cards for tail spend. Purchase cards can help you keep track of yourtail spend and limit your spending to a certain amount each month.

4. Negotiate with vendors. If you find that you’re spending too much on tail spend, try negotiating with vendors to get a better price. This can be especially effective if you’re buying in bulk or if you have long-term contracts with vendors

What are the benefits of managing tail spend?

There are many benefits to managing tail spend. By proactively managing this type of spend, companies can improve their bottom line and overall financial health. Additionally, they can better control costs, reduce waste, and streamline their procurement processes.

Some of the specific benefits of managing tail spend include:

1. reducing overall spending on non-essential or low-value items
2. improving negotiation power with suppliers
3. consolidating orders to reduce administrative costs
4. reducing the risk of fraud and abuse
5. improving visibility into spending patterns
6. simplifying the procurement process

How can technology help with managing tail spend?

Technology can help with managing tail spend in a number of ways. First, technology can help identify where tail spend is occurring. This can be done through the use of data analytics, which can help to uncover patterns and trends in spending. Once tail spend has been identified, technology can help to track it and monitor it on an ongoing basis. This can be done through the use of software that tracks spending across all departments and categories. Additionally, technology can help to automate the process of managing tail spend. This can include automating purchase orders and invoicing, as well as contract management and negotiation.


Tail spend can be a tricky but often necessary part of managing your business’s finances. With the right insights and analysis, you can make sure that any tail spend is managed effectively. By using analytics tools such as cost-tracking software, industry benchmarks, and third-party reviews to identify opportunities for savings and maximize efficiency in this area of spending, you will ensure that your organization runs smoothly with minimal waste. Additionally, partnering with an experienced tail spend management provider can provide additional support to help ensure optimal results from this important form of expenditure.

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