Spot buys normally can be recognized by one or more of the below indicators:

It’s estimated that nearly 40% of a company’s indirect spend is from spot purchases — ad hoc purchases made ‘on the spot’.2

Ad hoc or spot buying is often considered the opposite of strategic sourcing. Whereas strategic sourcing involves long-term procurement commitments, spot buying occurs when there is an immediate

requirement and a purchase must be made, quite literally, ‘on the spot ’. Thesepurchases are usually unplanned, made up of small orders, and often paid for immediately.

It’s about a process or decision that is made on a case-by-case basiswithout following a predetermined set of rules or procedures. Essentially, it means tackling procurement needs as they arise, rather than adhering

Unlike other procurement processes that are more structured and predictable, ad hoc purchases offer flexibility and agility. They allow organizations to quickly address urgent requirements or unforeseen circumstances that may not fit within regular procurement protocols.

There are potential risks associated with ad hoc purchases:

1. Lack of a standardized process Without a defined procurement framework in place, your organization can run the risk of inconsistent practices and potential inefficiencies.
   
   
   
   
   
2. The potential for reduced transparency and accountability Ad hoc procurements often involve bypassing standard procedures such as competitive bidding or formal contracts, resulting in maverick buying.

This can lead to

a. ncreased costs

b. onger processing times

c. ifficulty in tracking expenses

It may seem unconventional to purchase off-contract or to engage with new suppliers outside of existing agreements, but it can provide opportunities for organizations to tap into innovative solutions or negotiate better terms when faced with unique challenges.

Here, it’s important to note that ad hoc purchases should not be seen as a replacement for strategic sourcing strategies. Rather, they should complement existing processes by filling gaps and addressing specific needs that cannot be met through traditional methods.

Therefore, using an appropriate payment solution for those ad hoc expenses that complements the existing payment method is key for an optimized end-to-end payment process to make sure to get a full picture of all expenses

For the below examples, it may be more efficient and cost- effective to handle this as an ad hoc procurement rather than going through the lengthy process of obtaining bids and formal contracts:

AirPlus Virtual Cards Procurement are the payment solution you need as a specific fit for those on-the-spot purchases with suppliers that are not in the corporate supplier database of your company. Furthermore, AirPlus Virtual Cards Procurement are tailored for those purchases that are not handled centrally but by employees directly. This will come in handy as with the remote or hybrid work trend here to stay, it’s not likely companies will be returning to entirely centralised processes any time soon.

More reasons why AirPlus Virtual Cards Procurement are a good idea:

Thanks to payment with AirPlus Virtual Cards Procurement, your company can be sure to also track the on-the-spot purchases within your total corporate spend while meeting the needs of your employees and other procure-to-pay process stakeholders.