Non-Addressable Spend

Non-Addressable Spend encompasses expenditures that fall outside procurement's influence or control. These expenses are typically governed by regulatory requirements, internal policies, or specialized decision-making processes that limit procurement's ability to apply traditional sourcing strategies.

Common examples of non-addressable spend include:

• Government taxes, fees, and regulatory payments
• Internal salary and compensation costs
• Certain legal settlements and judgments
• Highly regulated or specialized purchases with limited supplier options
• Inter-company transfers and allocations
• Mandatory industry memberships and certifications

Understanding the distinction between addressable and non-addressable spend helps procurement organizations prioritize their efforts and set realistic targets for spend influence and savings potential across the organization's total expenditure.