Finance’s Blind Spot: 5 Steps to Bridge the Gap Between Procurement and You

Some roles are defined by what you do. Marketing, sales and engineering, for example, are measured by action. Others are defined by what they know. That’s finance.

In finance, we own the numbers and get paid to know where money’s coming in and going out. But vendor spend is often the exception. Finance is frequently the last to know what the company’s spending with vendors, and procurement doesn’t always have the full picture either.

Improving the Procurement and Finance Relationship

Procurement is the main liaison between finance and the business. After leading teams on both sides, I’ve seen how big the gap between the two can be. Procurement is focused on closing the deal. Finance is focused on the deal’s greater business impact. We’re left with burning questions about suppliers, approvers, contracts, pricing and purchase methods long after the paperwork is signed.

Blind Spot 1: Data

While closing the books at the end of the month, finance finds itself staring at ERP data, wondering if it reflects everything that came into the organization. When the procurement process is slow or cumbersome, the answer is probably “no.” You can assume some employees are bypassing procurement, but you don’t know how many, how much they spent, or if their purchases made it into the ERP this cycle.

Finance can track down rogue software purchases by asking IT to analyze what’s running on everyone’s machines, but that’s only one category of shadow spend. It comes in different packages and billing models, scattered across expense reports and corporate cards. The burden of managing shadow spend is distributed across procurement, accounting, and FP&A; there’s no unified owner or reliable single source of truth. Closing the books becomes an exercise in chasing cash.

Finance is accountable for the organization’s financial health. When we don’t fully trust our data, it’s hard to feel like we’re operating from an informed place.

Blind Spot 2: Renewals

Procurement can’t always inform finance about renewals, even if the two functions worked closer together, because so many purchases happen outside of the buying process. Think of the engineer expensing a software tool on their personal card to patch up an urgent security vulnerability. They’re just trying to get their work done quickly, but by circumventing procurement, finance finds out about a purchase after the renewal clock has already started ticking.

Without a clear picture of which contracts expire when, what they cost, and who owns the relationship internally, finance loses leverage before the negotiation even starts. You need all the time you can get to consider alternatives and propose other offers. If you don’t know when your contracts renew, you might end up stuck with a vendor you would have walked away from, and at a price you had no power to change.

Blind Spot 3: Vendor Spend

Do you know how much the business is spending on a major vendor like Microsoft? It’s a harder question to answer than it seems. Especially when you factor in different departments buying from different subsidiaries. You might have the IT department billing for 365 Suite, marketing advertising on LinkedIn, and engineering using GitHub. If your developers use GitHub Copilot’s AI features, the pricing will vary based on usage. The same dynamic plays out with cloud providers, where marketplace spend can be categorized separately than direct licensing. The true total number is anyone’s guess.

Vendors often give discounts to customers who can consolidate spend and show they’re committed partners. If you’re spending across a vendor’s portfolio but can’t see the whole picture, you can’t negotiate on it.

One of the best ways to find this knowledge is through zero-based budgeting. As painful as it is to start with a blank sheet of paper and decide what you need to run the business, the exercise really shows you what you can get rid of. Maybe you stumble upon two departments using different tools for the same purpose, like legal using Box and marketing using Dropbox.

Beyond its financial benefits, vendor consolidation will be critical as more companies build and invest in agentic business applications. AI agents are at their most powerful when they can operate across your platforms and give you new visibility into each system.

Paving the Path to Enlightenment

The path toward enlightenment doesn’t have to be paved with new tools and expensive consultants. Here’s a simplified approach:

1. Start by analyzing your 20 biggest partners.
2. Track down what you’re spending on them across cost centers.
3. Get up to date on any new M&A activity or functionalities vendors have added.
4. Find out when the contracts renew and who owns the relationship internally.
5. Once you’ve finished with the first batch, move on to your next 20 biggest vendors, and the next 20 after that, until you’ve reached 100.

You’ll be amazed at how many consolidation opportunities and forgotten contracts you’ll find. More importantly, you’ll finally know what you are working with. For a function defined by what it knows, that’s not a small thing.