Why look at the tail by category
Gartner describes tail spend as spend on noncritical goods and services from vendors that procurement does not actively manage. CIPS, the Chartered Institute of Procurement & Supply, notes it has been defined as the 10–20% of spend accounted for by 80% of an organisation's suppliers.
A supplier list tells you how many suppliers are in the tail. Categories tell you what is being bought and who buys it, and that is where you can act: one preferred supplier, one request route, one budget owner per category. For the wider picture, see our tail spend management guide.
Categories that usually sit in the tail
| Category | Typical purchases | Why it ends up in the tail |
|---|---|---|
| Office and facility supplies | Paper, cleaning supplies, breakroom items, small furniture | Bought often, by many people, frequently on a card |
| MRO and spare parts | Tools, safety items, replacement parts, lubricants | Urgent, so bought from whoever has stock |
| IT hardware and accessories | Cables, peripherals, adapters, small devices | Small amounts outside the main IT contracts |
| Software and subscriptions | Extra seats, plug-ins, online tools | Signed up by individual teams with a card |
| Professional services | Translation, design, small consulting jobs, one-off legal or tax work | One-time projects, each with a new supplier |
| Facility services | Repairs, pest control, landscaping, maintenance visits | Local suppliers chosen site by site |
| Marketing materials and events | Printing, promotional items, event services | Campaign by campaign, each with a new vendor |
| Logistics and freight | Courier, small shipments, local transport | Spot purchases when something is urgent |
Not every company has all of these, and many have their own: lab supplies, uniforms, kitchen supplies or packaging. Use the table as a starting list, not as a rule.
How to find your tail categories, step by step
- Start from your baseline data. Use the same 12 months and sources described in our tail spend baseline guide: bills and payments from accounting, corporate card lines and expense reimbursements, with supplier names already merged.
- Give every line one category from a list short enough for your team to maintain. You can add subcategories later.
- Apply your tail rule, so you know which suppliers are in the tail.
- Record five numbers per category: tail spend, number of tail suppliers, number of transactions, share bought by card or reimbursement, and the departments that buy.
- Rank categories by suppliers and transactions, not only by amount. A category with many suppliers and many small purchases is where one request route helps most, even if its total is modest.
- Name an owner for each category, the person who decides which suppliers to use and answers questions about it.
What to do with each kind of category
- Bought often from many suppliers (office supplies, MRO, IT accessories): agree on one or two preferred suppliers and send every request through the same route. Our vendor consolidation blueprint covers how to choose them.
- Recurring subscriptions: list them, give each one an owner, and review them before every renewal.
- One-off services: ask for a short request with scope and budget before anyone commits, and compare more than one quote when the amount justifies it.
- Urgent spot purchases (freight, spare parts): decide in advance who can request them and make sure each one is recorded with a purchase order, even when it is needed the same day.
Example
A maintenance team at a growing company with several sites lets each site manager buy repairs and cleaning supplies locally. Sorted by supplier, the tail is a long list of names nobody recognizes. Sorted by category, most of those names fall into two groups: facility services and cleaning supplies. The team picks one preferred cleaning-supplies distributor per region and keeps repair suppliers local, but every repair now starts with a request that names the site and the budget. The category view showed which part of the tail to consolidate and which part only needed a controlled route.
Common mistakes
- Too many categories. A detailed taxonomy nobody updates is less useful than a short list applied the same way every month.
- Using accounting accounts as categories without checking. One account such as "office expenses" can hide several different kinds of purchases.
- Ranking only by amount, which hides the categories with the most suppliers and transactions.
- Leaving card and reimbursement spend out, which is often where the tail lives.
- Changing categories midyear without rebuilding the baseline, so the months can no longer be compared.
Where software helps
Category numbers only stay useful if every purchase lands in the same record, with the same supplier name and category, whoever bought it.
Tail Sourcing Essentials does that for teams of 1 to 10 users. An Admin or Procurement Manager approves each request before the purchase order is issued. Budgets show committed vs spent before anyone approves. When goods arrive, the receipt is recorded, and each supplier invoice is matched to its purchase order and receipt before it is approved and synced to QuickBooks Online (US companies only). Your categories and owners stay in your hands; the software keeps every purchase on one recorded route.
FAQ
What are tail spend categories? They are the groups of purchases, mostly indirect, where many suppliers each receive small amounts and procurement does not actively manage the relationship. Common examples are office and facility supplies, MRO, IT accessories, software subscriptions, services, marketing materials and freight.
Which categories usually have the most tail spend? It depends on the company. The categories with the most tail suppliers are usually the ones bought often, by many people and from local or online suppliers, such as supplies, MRO, IT accessories and facility services. Your own data is the only reliable answer.
Is tail spend only indirect spend? Mostly, but direct materials can have a tail too, for example occasional suppliers of components or packaging. Measure it separately so it does not mix with production purchasing.
How many categories should I use? A short list your team can apply consistently. Start broad and add subcategories only when a category becomes too mixed to act on.
Can I use my chart of accounts as categories? As a starting point, yes. Check the accounts that mix different kinds of purchases and split them, because accounts describe how spend is booked, not what was bought.
How often should category numbers be updated? Monthly, with the same rules as your baseline: the same sources, supplier names, categories and tail rule.
Sorting tail spend categories turns a long, anonymous supplier list into a few groups with an owner and a route, which is where control starts. When you want every purchase in those categories to go through one approved route, see Tail Sourcing plans and pricing.
