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Importance of Direct and Indirect Spend In Procurement

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by Beroe Inc,
12 October 2022

What Is Direct and Indirect Spend In Procurement?

Regarding procurement, there are two common strategies pursued by companies, direct spend, and indirect spend. While both these options are essential for businesses, they require varied tools and resources for supplier relationship management. 

The best way to describe direct procurement is that it is concerned with obtaining materials, services, and goods that are directly related to offering products and services to the end customers. On the other hand, the optimal way to describe indirect procurement is the expenses undertaken to procure services, materials, and other inputs required to keep the business operational. 

No business can operate without a clear policy regarding direct and indirect spend management, respectively. A balance between the two holds the key to success for the business.

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