Every department is buying something, but no one’s following the same process.

Laptops, SaaS tools, event vendors, all your purchases are scattered across emails and spreadsheets. Approvals fall through the cracks. Finance has zero visibility.

That’s the hidden cost of unmanaged indirect procurement.

For mid-sized companies trying to scale, this chaos leads to overspending, delays, and compliance risks.

Indirect procurement software solves these issues. Modern procurement solutions help you gain control over spending, improve compliance, and reduce delays across departments. It consolidates purchase data, automates approval workflows, processes invoices, tracks budgets, and simplifies purchase order (PO) creation. 

In this article, we’ll explain how indirect procurement works, where most teams go wrong, and how the right tool fixes it.

What is Indirect Procurement?

Indirect procurement is the process of purchasing goods for day-to-day operations that aren’t directly related to your company’s core product. 

It impacts your cost control, budget visibility, compliance, and business scalability.

The process involves:

• Identifying needs across departments
• Submitting and approving purchase requisitions
• Generating purchase orders
• Invoicing and processing payments

Examples of indirect procurement include office supplies, software, marketing services, travel, utilities, and facility maintenance.

Indirect vs. Direct Procurement: The Difference Explained

Indirect procurement involves buying supplies or services to run day-to-day business operations. Direct procurement means purchasing goods, services, and equipment for your company’s core products. 

Indirect and direct procurement differ in their purpose and impact on operations.

Direct procurement is closely linked to production schedules, supplier contracts, and inventory management.

Indirect procurement supports the internal functions of the business, like HR, IT, marketing, and facilities. While it doesn’t contribute to the final product, it helps you run and scale effectively.

Aspect	Direct Spending	Indirect Spending
Definition	Purchasing goods and services directly used in making the product	Purchasing goods and services to support day-to-day business operations
Examples	Raw materials, manufacturing equipment	Office supplies, software licenses, marketing services
Impact on Product	Directly affects the final product delivered to customers	Doesn’t directly affect the final product
Departments Involved	Mostly handled by manufacturing, production, or supply chain management teams	Managed by admin, HR, IT, marketing, finance, etc.
Purchase Frequency	Often involves regular, bulk purchases from a few vendors	Often involves many small purchases from a wide range of vendors

How Mid-Sized Companies Can Manage Indirect Procurement With ProcureDesk

ProcureDesk is an indirect procurement software for small and midmarket businesses. Companies in biotech, climate tech, education, construction, real estate, manufacturing, and professional services love ProcureDesk for our procure-to-pay automation from requisition to payment.

ProcureDesk helps you optimize indirect procurement by automating purchase requisitions, invoice processing, and spend reporting. It also gives you real-time visibility to standardize purchasing and improve control across departments.

If managing indirect spend feels messy, inconsistent, or impossible to track, you’re not alone. Here’s how ProcureDesk helps midmarket companies take control:

Automate Multi-level Approvals for Quick Purchasing

Indirect purchases are low in value but need fast approvals, like software subscriptions, office supplies, or facility services. Without automated approval workflows, these routine requests can create unnecessary delays in your procurement processes.

ProcureDesk automates your approval workflows with multi-level functionalities. It lets you set custom rules that the software follows to automatically approve or redirect requests across different departments.

For example, the marketing team can create requests on ProcureDesk for a new analytics tool. The software will route the request based on the rule to the department head, finance, and procurement step by step. 

This speeds up approvals, meets policy compliance, and reduces manual follow-ups.

Automated Purchase Order Creation and Tracking for Visibility

Procurement teams struggle to track multiple POs due to limited visibility. This makes it difficult to stay organized, spot delays, or control spending.

ProcureDesk simplifies this with automated purchase order creation and real-time tracking. Once a purchase request is approved, the procurement system instantly generates a purchase order and sends it to the vendor. 

The software consolidates your POs into a single dashboard. Each PO is linked to its request and budget. You can track order status, set reminders for delayed deliveries, and maintain a full audit trail for every transaction. 

This helps you manage a high volume of indirect purchases from different departments with real-time tracking and cost savings.

Spend Management for Budget Control and Limits

Indirect procurement without clear spend controls can cause overspending or unauthorized approvals. 

ProcureDesk acts as a spend analytics tool for procurement, allowing you to set and monitor budgets across departments, projects, or cost centers. This real-time tracking improves spend visibility and helps you align all indirect purchases with allocated budgets, reducing the risk of overspending.

ProcureDesk’s centralized dashboard consolidates all procurement activities, allowing procurement teams to identify their indirect spending patterns and improve decision-making. They can then use this data to evaluate vendors, set compliance standards, and define spending limits. 

When an employee sends a request, the software checks spending limits and pre-set rules to redirect it for approvals. This helps you control your budget and grow sustainably.

Automated Invoicing with 3-Way PO Matching

Mid-sized businesses often process 500+ invoices per month. Yet, most rely on manual data entry for invoice processing, which can lead to inefficiencies and errors.

ProcureDesk is an invoice workflow software that automatically matches invoices with purchase orders and receipts, also known as 3-way matching. 

The software routes specific invoices through the right approvers based on preconditions. This reduces processing time and improves accuracy, audit readiness, and control over indirect spending.

Punchout Catalogs for Quality Purchases

Mid-sized teams need tighter control over indirect purchases. Managing multiple catalog categories and higher volumes of spend quickly becomes complex without the right systems in place.

ProcureDesk supports custom punchout catalog integration, allowing teams to buy from preferred vendor catalogs directly to improve the purchasing experience. The software supports 150+ vendors, including ThermoFisher, Fisher Scientific, and VWR.

This integration provides real-time access to up-to-date product information and pricing. You don’t have to update your price sheets and manually create POs for each item.

For example, a school’s admin team can use ProcureDesk’s punchout catalog to order markers and printer ink directly from Staples. The order flows through ProcureDesk for approval and PO creation with accurate pricing and faster processing.

Vendor Management for Performance Evaluation

Supplier management becomes a mess without a centralized system. Different departments might choose multiple suppliers for similar items. This leads to duplicate vendors and overspending.

ProcureDesk streamlines vendor management by consolidating all supplier information, including contacts, contracts, and performance records. 

As a strategic sourcing software, ProcureDesk allows you to monitor supplier performance using key metrics like delivery times, product quality, and compliance with service level agreements (SLAs). 

For example, a biotech company needs to source lab supplies, specialized equipment maintenance, and facility sterilization services from different vendors. With ProcureDesk, the team can track KPIs like delivery reliability, equipment uptime, and contract compliance across all departments.

This helps reduce disruptions in day-to-day operations, improve risk management, and make sure suppliers meet expectations.

ProcureDesk Pricing

ProcureDesk charges three pricing plans: 

Plan	Price (Monthly)	Users Included	Key Features
Purchasing Automation	$598/mo	10 Users	Onboarding Support, Custom Approval Workflows
Purchasing & AP Automation	$948/mo	Custom	All purchasing automation features, Invoice Approval Workflows, 3-Way Invoice Matching, OCR for Invoices
Enterprise	Custom Quote	Custom	All purchasing automation features, Dedicated Account Manager, Vendor Portal, Single Sign-On (SSO)

Challenges of Indirect Procurement

Here are the common challenges mid-sized companies face in indirect procurement:

Lack of Visibility

Indirect purchases are often spread across multiple departments. Procurement teams lack the tools to track spend, identify savings opportunities, or meet the company’s own compliance standards.

Unauthorized Spending

Multiple departments make purchases without centralized oversight. Employees bypass approved vendors or skip the requisition process altogether. This leads to inconsistent pricing and weaker negotiating power, which affects budget control. 

Manual and Disconnected Processes

Many teams still rely on spreadsheets, email approvals, or disconnected finance tools. This creates inefficiencies, slows down purchasing cycles, and increases the risk of errors.

Limited Strategic Focus

Many companies see indirect procurement as daily spending rather than a strategic area for cost control. Without clear policies, teams don’t put spending limits or standardize vendors. 

Scattered Supplier Relationships

Different teams choose suppliers without coordination, missing out on volume discounts or long-term partnerships. This lack of alignment complicates managing contracts, tracking performance, or negotiating better pricing. 

Indirect Procurement Strategies

Here are some indirect procurement strategies that midmarket teams should adopt:

Conducting Regular Spend Analysis

Regular spend analysis gives your procurement team clear visibility into purchasing behavior across departments. 

This helps you uncover unauthorized spend, duplicate vendors, pricing inconsistencies, and cost-saving opportunities earlier for better budget control and compliance.

For example, a biotech firm discovered that three departments were purchasing the same lab consumables from different vendors at different rates. Ongoing reviews helped them consolidate purchasing, reduce unnecessary costs, and redirect savings to more strategic R&D initiatives.

Segment Indirect Spend and Apply Tailored Strategies

You should segment indirect categories and apply different procurement strategies. For example:

• High-frequency, low-risk items (e.g., janitorial supplies) benefit from automation and preferred vendor catalogs
• Low-frequency, high-value items (e.g., IT systems or legal services) may require vendor evaluation, relationship management, and long-term contracts

By aligning strategy with the risk, value, and frequency of spend in each category, you can reduce waste and improve procurement performance across the board. This makes sure your procurement efforts align with broader business needs.

Reduce Unauthorized Buying with Policy and Training

Unauthorized or maverick buying can increase costs by up to 20%, especially in categories like office supplies or IT services.

Implement a structured procurement policy that defines who can purchase, what they can buy, and from which vendors. You can hold training modules to help employees understand compliant purchasing.

You should also regularly audit purchasing activity to identify maverick spend and give stakeholders visibility into non-compliant purchases. This helps you adopt long-term accountability over your spending.

Use E-Procurement Tools to Automate and Standardize

E-procurement systems offer e-catalogs, e-invoicing, purchase order creation, and automated approval workflows. By digitizing the process, you can enforce compliance, reduce manual errors, and speed up approvals. 

E-procurement systems also improve real-time tracking and integrate easily with your ERP and financial software for reconciliation. 

Case Study: How Cerebral Therapeutics Improved Indirect Procurement with ProcureDesk

The Problem

Cerebral Therapeutics, a clinical-stage biotech company, struggled with manual processes for managing indirect procurement. 

Teams used Word documents for purchase orders and Excel sheets for tracking expenses. As the company grew, this approach led to slow approvals, tracking errors, and a lack of visibility into vendor spending.

The Solution

Cerebral Therapeutics implemented ProcureDesk to automate its indirect procurement workflows.

This allowed them to:

• Automate purchase order creation and invoice reconciliation
• Track vendor spending over time for better financial planning
• Integrate procurement data with Xero to sync accounting data.

“I think the biggest impact ProcureDesk has had for us is being able to avoid hiring people to continue to support our manual processes…”  – Guy Anthony, CFO at Cerebral Therapeutics.

The Impact

• Reduced admin costs: Avoided hiring 2–3 additional staff to handle manual processes
• Accurate purchasing: Automated approvals and PO generation for faster purchasing
• Better financial insights: Real-time vendor spend tracking for budgeting and forecasting.

Bottom Line

Indirect procurement doesn’t go into your final product, but it has a big impact on how your company runs and grows. For mid-sized companies, purchases happen across departments, which leads to overspending or approval delays. 

Indirect procurement software helps you standardize your purchasing and procurement processes. With the right tool, you gain control and visibility into your entire workflow.

ProcureDesk automates indirect procurement by streamlining purchasing processes and approvals. All while giving real-time visibility into spend management through advanced reporting.

With our built-in tools, you can control your spending, streamline invoicing, and centralize your entire procurement lifecycle across all teams. 

Book a free demo to see how ProcureDesk brings visibility and control to indirect procurement for midmarket companies.