Jeremy Ferrer
Running a procurement audit has become essential to understand and optimise C-class spend, a perimeter that is often underestimated but responsible for a large share of hidden costs. These low-value, highly fragmented purchases are spread across multiple departments, one-off suppliers and non-centralised orders, making them difficult to control without a structured analysis. Organisations that already have a formal approach in place, such as those that have assessed the impact of C-class spend on overall performance or started an outsourcing strategy for non-strategic purchases, for example by exploring Optimization through Outsourcing: Benefits for All Industries, already have a solid foundation to go further in their diagnostic work.
A C-class spend audit follows a simple logic: see, understand, correct. It helps identify anomalies, assess process maturity, detect price variances and strengthen procurement governance. Within the constraints of internal control, recognised methodologies in finance and management control offer a useful framework to structure the analysis of accounting and operational flows without overloading processes. Ultimately, the objective is to provide a clear and actionable view that reduces costs, reinforces compliance and improves operational performance.
C-class spend covers all the goods and services needed for the day-to-day running of the company whose unit value is low but whose frequency and dispersion are high. It includes very diverse categories: facility management, maintenance, IT, one-off services, logistics, travel, consumables, small tools and equipment. Their dispersion and low unit value make them complex to monitor, which is why they often escape traditional procurement governance. To complete this picture, it is useful to compare C-class spend with what many experts call “tail spend” in procurement, as in resources dedicated to understanding tail spend and its impact on procurement, which show how unmanaged low-value purchases can become a structural performance issue.
A C-class spend audit restores visibility on a fragmented perimeter made up of micro-purchases, occasional suppliers and manual processes. This visibility is essential to identify price discrepancies, invoicing anomalies and operational inefficiencies. Among the most frequent findings are non-centralised purchasing behaviours, emergency orders and off-contract transactions. In parallel, several market analyses on tail spend management highlight that C-class spend represents a strategic topic for procurement leaders, because it concentrates a significant share of administrative and process costs while remaining largely unmanaged.
C-class spend usually suffers from three structural problems:
Lack of control over C-class spend exposes the company to several risks:
The first phase of an effective C-class spend audit consists of consolidating all available information, which is often scattered across multiple systems. Purchasing data typically comes from the ERP, finance, supplier invoices, contract management tools, one-off purchases and corporate cards. To obtain a usable view of C-class spend, it is essential to bring these sources together without omissions and structure them into a consistent format.
A critical part of this step is reviewing fragmented purchasing behaviours, especially micro-requests generated outside the procurement process, which reveal one-off suppliers and inconsistent transactions. This approach aligns with best practices presented in the guide to using AI to centralize and standardise contract processes, which demonstrates how early standardisation simplifies the entire purchasing cycle.
Purchasing data is often dispersed across multiple tools, making rigorous consolidation necessary:
Comprehensive data collection avoids distorted or incomplete analysis.
Once the data is consolidated, several actions are necessary:
This step secures the foundations of the audit and ensures reliable indicators.
Once the data is consolidated and normalised, the audit can move into the analytical phase. Spend analysis by category is essential to understand the structure of C-class spend, identify savings levers and detect risk zones. Because C-class items are extremely dispersed, rigorous segmentation is necessary to clarify volumes, purchasing frequency, administrative costs and purchasing behaviours.
Among the most common findings are non-catalogue purchases, which indicate weak governance or a lack of structured suppliers. Segmentation highlights the families with the highest savings potential and those requiring stronger supplier frameworks. Multiple studies on C-class and tail-spend optimisation emphasise the importance of spend consolidation, supplier rationalisation and process standardisation, confirming the value of this step.
Segmentation consists of dividing purchases into homogeneous families:
This classification isolates categories with high frequency, high variability or high exposure to off-panel spend.
The analysis must highlight:
This is where the first real saving opportunities emerge—particularly through supplier panel rationalisation and category standardisation. On the topic of ongoing monitoring, best practices are illustrated in content dedicated to AI-driven spend prediction and demand anticipation.
Analysing the supplier base is one of the central phases of a C-class spend audit. It allows you to assess how supplier relationships are structured, identify risks and inefficiencies, and uncover consolidation opportunities. While strategic spend is usually well managed, C-class spend often involves a large number of small suppliers, sometimes one-off or poorly qualified, which increases administrative complexity and overall cost.
An effective C-class spend audit must look beyond volumes and prices to assess the quality of the supplier relationship: documentation compliance, on-time delivery, operational performance, incident rates, stability over time and price consistency. Many of these topics are directly linked to supplier performance management best practices described in resources such as procurement KPI frameworks used to monitor supplier performance. Combined with internal dashboards, they form a solid basis for a more mature approach to C-class suppliers.
Organisations without a formal C-class spend strategy typically find that they:
This situation usually reflects a lack of governance and extensive rogue C-class spend outside preferred suppliers and contracts.
Supplier performance must be evaluated against several key criteria:
The objective is to identify reliable suppliers to keep and develop, those that require improvement plans, and those that should be removed from the C-class supplier panel. This work is much easier to sustain over time when supported by a structured purchasing dashboard that consolidates key KPIs.
A detailed analysis of C-class suppliers usually reveals three main types of risk:
Each risk must be mapped and weighted in order to prioritise actions and define appropriate mitigation plans. Combining this with process automation, such as the practices described in guides to automating purchase requests, makes it easier to manage a large number of C-class suppliers without losing control.
This analysis is essential to build a C-class supplier panel that is stable, secure and aligned with the company’s operational and financial objectives.
Rogue C-class spend — off-contract, off-panel or unapproved purchases — is one of the most common weaknesses uncovered during an audit. It occurs when employees buy products or services directly without following the internal purchasing process. These transactions, often triggered by urgency or convenience, escape control, multiply suppliers and cause major price inconsistencies. They also represent a significant share of the hidden costs identified during the audit. Additional insights on this topic can be found in research on procurement efficiency and tail-spend control by Deloitte.
A key part of the analysis consists of detecting isolated behaviours across the spend flow—especially when linked to one-off orders or unknown suppliers. This phenomenon is closely connected to issues identified in uncategorised spend, spot purchases and urgent transactions, highlighting the need for process simplification and centralisation.
The main causes identified during audits include:
When the official process is not simpler than direct purchasing, users naturally bypass it.
Several warning signs indicate off-panel or unapproved spend:
These patterns appear very early in spend analysis and reveal structural weaknesses in category management.
One of the most critical dimensions of a C-class spend audit is assessing the true administrative cost of low-value purchases. Although unit prices are low, every transaction requires multiple internal actions: request creation, approval workflow, PO issuance, receipt, invoice processing, reconciliation and payment. These costs — often invisible — typically range from £20 to £80 per invoice. According to studies published by the UK’s Chartered Institute of Procurement & Supply (CIPS), administrative processing costs often exceed the value of the item being purchased.
The audit must consider the entire “request → order → receipt → invoice → payment” cycle, since inefficiencies at any stage generate delays, hidden costs and higher workload. This is particularly visible when departments generate their own micro-purchases without a standardised request procedure in place. To reduce these inefficiencies, many experts recommend digitalisation initiatives, including those explored in BME’s content dedicated to automating purchase requests.
To correctly analyse administrative costs, it is essential to assess:
Each phase generates a real internal cost that the audit must quantify.
Most companies discover during audits that they face:
These administrative inefficiencies significantly impact global procurement performance.
A C-class spend audit is only valuable if it concludes with clear, actionable recommendations. The goal is to strengthen procurement governance, reduce hidden costs and improve operational performance. Recommendations must be prioritised, realistic and aligned with the organisation’s internal capacity. They should address processes, tools, the supplier panel and purchasing workflows.
Recommendations must cover the entire purchasing ecosystem: improving the request process, consolidating suppliers, standardising categories, reducing rogue spend and enhancing documentation compliance. When executed correctly, these measures provide a strong foundation to sustainably control C-class spend.
One of the fastest and most impactful actions is to reduce the number of suppliers in selected categories. Key benefits include:
Effective rationalisation also supports framework agreements and helps stabilise service quality.
Most inefficiencies identified during the audit are linked to manual or poorly digitalised processes. Transformation priorities include:
Digitalisation strengthens compliance while reducing processing time and manual errors.
Some categories require targeted sourcing to improve performance:
Targeted sourcing helps:
Based on supplier analysis, it is essential to build a compliance and documentation plan that includes:
The last step of the audit consists of consolidating the results into summary dashboards. These tables help decision-makers quickly understand priorities, savings opportunities and required actions.
A C-class spend audit is an essential tool to regain control over low-value purchases, which are often fragmented, unpredictable and costly when unmanaged. Through reliable data collection, rigorous categorisation, detailed supplier analysis and identification of rogue spend, organisations gain clear visibility over their improvement potential.
The audit highlights immediate savings opportunities while initiating a long-term transformation: workflow automation, panel rationalisation, price harmonisation, documentation compliance and ongoing performance steering with reliable KPIs.
Contact our experts to conduct a full C-class spend audit and identify the most effective actions to optimise your procurement operations.
Detailed analysis of volume, frequency and supplier dispersion is required. The most expensive C-class items are often those with high administrative costs — micro-purchases, isolated invoices or unplanned requests. Rigorous categorisation quickly highlights areas with the highest saving potential.
Key indicators include price variability, off-panel spend ratio, number of suppliers per category, share of micro-purchases and administrative cost per transaction. These KPIs help evaluate performance and identify significant deviations.
Actions should be prioritised based on financial impact, feasibility and contribution to risk reduction. High-priority items typically include supplier panel rationalisation, centralisation of requests and price standardisation.
Internal audits benefit from deep organisational knowledge but may lack neutrality. External audits bring independence, benchmarking, proven methodologies and a sharper ability to detect anomalies and opportunities quickly.
Most organisations conduct a full audit every 12–24 months. Monthly dashboards help maintain discipline and prevent deviations between audit cycles.
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