Effective spend control is one of the most impactful levers for a company’s financial health, but it’s also one of the most complex to properly master. From early-stage startups to mature companies, the scale, processes, and challenges of managing indirect spend evolve dramatically as a business grows. By understanding how spend management best practices change across these growth stages, finance leaders can better optimize their procurement processes and avoid unnecessary costs, inefficiencies, and risks.

Here we’re going to break down insights and best practices for controlling spend at various company sizes, from small, agile teams to larger, more structured organizations. These approaches are drawn from my real-world experiences and lessons learned in the trenches of high-growth startups, late-stage scale ups, and working with large enterprises.

What is indirect spend?

Indirect spend includes all expenses on third-party goods and services that aren’t headcount-related costs. Examples of indirect spend range from software and hardware to contractors, agencies, and other services. This category of spend usually scales with headcount and organizational complexity, making it a growing area of focus for finance and procurement teams as a company grows.

A rough benchmark to keep in mind is that for most businesses, indirect spend represents about 15% of revenue, but this number can vary, typically ranging between 8-27%, depending on your industry and business model. As your business grows, both the number of suppliers you need to manage, and the percentage of revenue allocated to indirect spend typically tends to increase.

For example, based on our scale-up research, each employee is associated with roughly 2.1 active suppliers on average, and each year you could expect to see 0.2 new supplier requests and 0.4 total spend events (new purchase requests plus renewals) per employee. As headcount rises, these numbers grow quickly, demanding a more structured approach to managing this spend.

Here’s how different processes typically evolve to support this growing complexity across early-stage, scaling companies, pre-enterprise, and enterprise businesses.

Early-Stage Companies (0-100 Employees)

In their early stages, companies should focus on speed and flexibility. Formal procurement processes tend to be light-touch, and while this lack of structure can lead to waste, it’s often a natural byproduct of high-pace growth. Early-stage spend management typically looks like:

Budgeting and Approvals: 

  • Budgets for high-value items are usually in place, but the control of spend, suppliers, and contracts is largely decentralized. 
  • Requests for purchases are typically communicated informally—via Slack, email or in-person—with limited oversight.

Supplier and Risk Management: 

  • Supplier risk management at this stage is usually low, and proactive management is often ad hoc. Employees may use corporate cards for purchases, sometimes without explicit approvals. Some companies may track major software suppliers in tools like Notion or in spreadsheets. Supplier risks are seldom formally tracked and managed.

Contract and Renewal Tracking: 

  • Contract management at this stage can be chaotic, and at best, contracts might be stored in Google Drive or in a signatory’s DocuSign folder. Renewals are tracked through spreadsheets, and while eager account managers might provide reminders for renewal dates, this approach lacks consistency and often misses opportunities to re-negotiate or eliminate unused subscriptions.

At this size, a lower volume of requests keeps spend control manageable, but tends to be loosely controlled. Decentralization is sustainable for nimble operations, though finance leaders must keep an eye on scalability and lay the groundwork for more formal systems as the company grows. At a minimum as inflection points are approached, this data needs to be consolidated into a spreadsheet or centralised folder, to ease the transition to future more ordered systems.

Scaling Companies (100-500 Employees)

‍As companies grow to around 100-500 employees, they begin to feel the strain of informal procurement processes. With a larger volume of requests, a more structured approach is required to avoid the inefficiencies and risks that arise from decentralized spend control. In other words, the benefits of moving fast are outweighed by increasing risk, duplicative spend, and unmanaged renewals. Typically, forcing functions—customer requirements, regulation, or external certifications—will create an external requirement for increased data management.

Budgeting and Approvals: 

  • Centralized policies are now necessary. Budgets become more rigorous, and finance leaders may adopt tools like Anaplan for budget tracking, though enforcing these checks can be inconsistent.
  • Companies also often start trying to use ticketing systems like Jira or Asana to manage purchase requests and track renewals, with approvals becoming more formalized, with budget holders, legal, information security, and IT stakeholders often involved in reviewing all requests. This is a natural next-step, but the lack of dedicated functionality means that processes remain predominantly manual, and work is often duplicated. 
  • While Slack channels or email threads may still be used for communication, collaboration across departments can become challenging. Processes at this stage tend to be ‘one size fits all’, and as the process comes into existence, the challenges of getting the process to be followed start to emerge. 

Supplier and Risk Management:

  • Supplier risk management at this stage is usually nascent and driven by certifications. These can often lead to certain no-go criteria for new suppliers, against which vendors need to be checked. This is usually the driver for increased involvement by information security, compliance, and IT in procurement processes. 
  • Whilst vendor compliance might be documented in a spreadsheet, ongoing risk assessments and remediation of risks tends to be on an ad-hoc basis rather than a proactive activity.

Contract and Renewal Tracking: 

  • An ERP, such as NetSuite, is typically in place by this stage, but the management of contracts and renewals remains a challenge. High-value contracts may still be tracked in spreadsheets or Google Drive, which can become error-prone and difficult to scale.

A more formalised procurement process is essential at this scale to ensure oversight and control over spend. Information is typically spread across each stakeholder group’s tech stack (now typically including finance, legal, IT, InfoSec, Compliance). These functions have usually matured faster than procurement as an activity. Process complexity and tech-stack interactions and orchestration when managing procurement processes can start to become onerous towards the upper end of this size range, meaning data has to be manually transferred between systems, and process owners spend a significant amount of time shepherding processes between different stakeholder groups. Speaking of which, the ‘process owner’ could be someone from finance, operations, IT, or business operations who is tasked with overseeing supplier spend, helping to bridge gaps and maintain compliance with policies, but typically there is a shared responsibility. It’s only as we reach the upper end of this threshold that we usually see dedicated procurement personnel join businesses, so there’s a balance to be struck here with managing a more complex—but still relatively agile—business’ growing lists of spend and suppliers, without it strictly being in any one person’s typical job description. 

Pre-enterprise Companies (500-1000 Employees)

‍Once a company surpasses 500 employees, the complexity of managing indirect spend reaches a level that demands dedicated procurement resources and automation. The volume of spend events, coupled with a larger supplier base, requires a sophisticated approach to ensure efficiency, control, and, crucially, adoption of the processes. It’s at around this size that we tend to see dedicated procurement professionals joining businesses.

Budgeting and Approvals:

  • Policies and processes are typically quite complicated at this stage, with increased granularity and different approval processes for different types and quantums of spend, plus more complex cost centre and entity structures.

Supplier and Risk Management: 

  • Supplier risk management tends to be more evolved, requiring proactive risk assessments and ongoing management and remediation of supplier risks.
  • Additionally, at this size, strategic supplier management and assessment—both of cost, but also SLAs and terms—becomes a key and critical competency.

Contract and Renewal Tracking: 

  • In addition to an ERP, the management of contracts and renewals is often integrated with a Contract Lifecycle Management system, to ensure an increasingly complex set of requirements is reflected in customer contracts. 
  • Working off spreadsheets and ticketing systems for renewals at this size tends to become either ineffective, or unreasonably noisy for the multiple parties involved in the assessment processes.

As processes become more complex, and complexity and requirements increase, poor procurement experiences for employees tends to lead to either avoidance of processes and shadow-IT, or painfully long procurement cycles that can take months for even the most basic of tools. Orchestrating mature functions’ various expanding and complex tech stacks also becomes a challenge whilst maintaining an effective and consistently utilized front door to spend. To tackle this, the best functioning procurement set-ups we’ve seen usually take the following actions:

Hiring a Procurement Specialist or Team: 

  • At this stage, it’s time to bring in a procurement expert or team to manage supplier relationships, negotiate contracts, and provide centralized oversight. The investment in procurement resources becomes ROI-positive at this scale, as it enables the company to proactively manage spend, avoid duplicative contracts, and secure better terms with suppliers.

Invest in Procurement Intake and Orchestration: 

  • Procurement intake and orchestration tools allow companies to streamline the entire procurement lifecycle. Just as other more mature functions developed their stack over the prior years, now is the time for the procurement stack to receive dedicated attention. We’ve built Omnea to create better, more customised experiences at each stage of the procurement lifecycle, leading to greater adoption of processes, proactive intervention and control, and considerable time efficiencies. A centralized system offers a single source of truth for procurement data, helping finance leaders maintain control over spend and mitigate risk.

Enhance Spend Control and Risk Management:

  • By automating supplier approval, onboarding and tracking, companies at this stage can ensure compliance with legal, information security, and budgetary requirements, and with an effective set of automations, also increase the strength of their processes and controls. 

Enterprise Companies (1000+ Employees)

‍As companies continue to grow, the ROI to be found in best-in-class dedicated tooling expands as the complexities grow and continuous improvement of cost and risk controls, and process adoption drive significant returns.When companies are this large, the nature of the scale involved often leads to unnoticed duplication or supplier-overlap that a single centralised system is needed to identify, and the ability to track spend by categories becomes critical in identifying strategic opportunities to engage with key suppliers to get better terms and economies of scale. That’s why we built Supplier Deduplication into Omnea’s Intelligent Intake. It flags duplication at request, and redirects employees to overlapping tools that could meet their requirements. 

Best Practices for Spend Management at Every Stage

‍Regardless of company size, there are some universal strategies that finance leaders can implement to maximize spend control and efficiency.

Set a spend threshold

Define a threshold for purchases (e.g., $1k, $5k, or $10k) beyond which a formal process must be followed. This helps manage high-value spend without introducing too much friction for routine expenses. As you grow, thresholds can evolve and mature by spend type and prior budget approvals. Intake and orchestration systems can help enforce these—for example, in Omnea financial thresholds would trigger different types of approval workflows, and initiate sourcing events or increased scrutiny.

Encourage strategic thinking 

Requesters should be encouraged to consider the broader business context of their spend. For example, asking employees if a purchase supports operational efficiency, mitigates risk, or accelerates growth can help filter out unnecessary requests.

Reduce duplication

Duplicate tooling is common in growing companies, where multiple teams might request similar software or services. Prompt requesters to check for existing solutions before approving a new purchase.

Build a decentralised negotiation mindset

Negotiation is an important action whilst managing third party spend, but is something that’s simpler to enable supplier-owners to do than people expect! Team members should be encouraged to ask for discounts or better terms for the business, and arming employees with reminders and pre-written emails to request discounts, push back on price increases can drive a surprising amount of savings even if there are no ‘expert negotiators’ on your team.

Streamline approval workflows

Create an approval matrix to streamline decision-making for unbudgeted requests. This might include setting approval levels based on spend amount and requiring higher-level sign-off for major purchases.

Centralize supplier and contract data

Using a shared drive or centralized system to store all supplier-related information—contracts, renewal dates, negotiation outcomes, etc.—is essential for tracking commitments and ensuring timely renewals.

Implement a renewals calendar

Keep track of all renewal dates, with reminders set for 30, 60, or 90 days before renewal. This provides time for negotiation and prevents unwanted auto-renewals.

Key takeaways for managing suppliers and spend

‍Managing indirect spend is a journey that evolves with a company’s growth. Early-stage businesses can afford to prioritize speed and flexibility, and focus on the stacks critical to their more mature functions, but as headcount and complexity grow, a more structured approach is essential to control costs, manage suppliers, and mitigate risks. By adopting these best practices and investing in the right resources at the right time, finance leaders can transform spend management from a reactive, chaotic process into a strategic advantage that drives value across the organization.

That’s why I'm helping build Omnea. It’s an intake and orchestration platform that creates a single front door for all spend—automating approval and risk management processes. It’s designed to deliver consumer grade user experience, both for requesters, and for process owners. We’re trusted by businesses ranging from scale-ups like Pleo, Thought Machine, and Proofpoint  to enterprises, like Spotify, Adecco, and Reach plc to manage their suppliers and spend.

If you’re looking to bring more structure to how you control your spend and suppliers, please get in touch—we’d love to arrange a demo.