oboloo Glossary

Direct Spend

Direct Spend

Direct spend is the total amount of money that a company spends on goods and services in a given period. This includes both the cost of materials and the cost of labour. Direct spend does not include indirect costs, such as overhead or marketing expenses.

Direct spend is a key metric for companies to track, as it can be used to measure the efficiency of operations and identify areas where cost savings can be achieved. For example, if a company’s direct spend is increasing but its sales are not, this could indicate that the company is overspending on materials or labour. Alternatively, if a company’s direct spend is decreasing but its sales are increasing, this could indicate that the company is becoming more efficient in its use of resources.

Direct spend is also a key input into financial models such as activity-based costing (ABC) and life-cycle costing (LCC). These models help companies understand the full cost of their products or services, and can be used to make decisions about pricing, production, and other factors.

Want to find out more about oboloo?

Find out how oboloo can give you visibility and control over every part of your procurement process

Oboloo transparent

The smarter way to have full visibility & control of your suppliers

Contact

Feel free to contact us here. Our support team will get back to you as soon as possible

Oboloo transparent

The smarter way to have full visibility & control of your suppliers

Menu

Contact

Feel free to contact us here. Our support team will get back to you as soon as possible

© 2023 oboloo Limited. All rights reserved. Republication or redistribution of oboloo content, including by framing or similar means, is prohibited without the prior written consent of oboloo Limited. oboloo, Be Supplier Smart and the oboloo logo are registered trademarks of oboloo Limited and its affiliated companies. Trademark numbers: UK00003466421 & UK00003575938 Company Number 12420854. ICO Reference Number: ZA764971

Skip to toolbar