Plain-language definitions for the terms procurement and finance teams use every day — from value leakage to TPRM to should-cost modelling.
Value leakage is the gap between the savings a procurement team negotiates and the savings that actually reach the bottom line, typically caused by contract non-compliance, maverick spending, or billing errors.
Read definition →TPRM is the process of identifying, assessing, and monitoring risks that arise from an organisation's relationships with external vendors, suppliers, and service providers.
Read definition →Maverick spend is purchasing that happens outside of approved contracts and procurement channels, bypassing negotiated pricing and compliance controls.
Read definition →Tail spend refers to the large number of low-value, low-frequency purchases that collectively represent a significant portion of total spend but receive little procurement attention.
Read definition →Spend leakage is the unintended loss of budgeted procurement value through billing errors, payment duplicates, unclaimed rebates, and off-contract purchasing.
Read definition →Contract intelligence is the use of AI to extract, analyse, and monitor commercial obligations from supplier contracts so that procurement teams can enforce terms and capture negotiated value.
Read definition →Procurement intelligence is the use of data analytics and AI to give procurement teams real-time visibility into spend patterns, supplier risks, market conditions, and savings opportunities across the full procurement lifecycle.
Read definition →Three-way match is the accounts payable control that compares a supplier invoice against the purchase order and goods receipt note to verify that what was ordered, received, and billed all agree before payment is released.
Read definition →Should-cost modelling is a technique that builds up the expected price of a product or service from its constituent cost drivers — materials, labour, overhead, and profit — to establish a target price before supplier negotiations.
Read definition →Supplier risk monitoring is the ongoing process of tracking financial, operational, geopolitical, and ESG risk signals across an organisation's supplier base to detect threats before they cause supply disruptions.
Read definition →ProcureLabs detects value leakage, monitors supplier risk, and surfaces contract intelligence — all in one platform with Pala, our AI procurement copilot.