Category Spend

Category spend in procurement refers to the total amount of money an organization spends on a specific group of related goods or services, typically organized into spend categories. These categories are defined based on the nature, function, or supplier market of the items—for example, IT equipment, office supplies, professional services, or raw materials.

Procurement teams use category spend analysis to gain visibility into spending patterns, consolidate suppliers, negotiate better contracts, and identify cost-saving opportunities. By grouping purchases into categories, organizations can apply tailored sourcing strategies, improve compliance, and manage risk more effectively.

For instance, if a company spends $5 million annually on marketing services, that amount would be considered the category spend for marketing. Understanding this spend helps category managers make informed decisions on budgeting, supplier performance, and future procurement initiatives.