Skip to main content

Supplier Spend Analysis Report

Overview​

The Supplier Spend Analysis report breaks down total procurement expenditure by supplier and item category, revealing spending patterns and concentration risks. Use this report to identify top suppliers, evaluate category spending, discover consolidation opportunities, and support strategic sourcing decisions.

When to Use This Report​

Use this report when you need to:

  • Identify top suppliers by spend for relationship prioritization
  • Analyze spending patterns by item category
  • Discover opportunities for supplier consolidation
  • Support supplier negotiation with spend data
  • Evaluate supplier concentration and diversification needs
  • Track spending trends over time by comparing periods

How to Run the Report​

Step 1: Navigate to Purchase Reports​

Access through main navigation: Reports → Purchase Reports

Select Supplier Spend Analysis from the Reports dropdown.

Step 2: Apply Filters​

Report Selector

Ensure Supplier Spend Analysis is selected in the Reports dropdown.

Date Range

Select your analysis period using the Date Range picker:

  • Today - Purchases today (limited usefulness for spend analysis)
  • This Week - Current week spending
  • This Month - Current month activity (most common)
  • This Quarter - Quarterly spend analysis
  • This Year - Year-to-date spending
  • Custom Range - Specify exact start and end dates

The date range filters based on purchase transaction dates (bills, purchase orders, or payments depending on system configuration).

Supplier Filter (Optional)

Leave blank to see all suppliers, or select a specific supplier to drill into their category breakdown.

Step 3: Run Report​

Click Run Report to generate the supplier spend analysis.

The report displays as a table showing suppliers with their associated item categories and total spend amounts.

Understanding the Report​

Report Structure​

The report presents data in a hierarchical format:

ColumnDescriptionExample
Supplier NameVendor name with multiple rows if selling different categoriesS4S, John Bhai, Murli, Rajesh Arora, Envogue
Item CategoryProduct category purchased from this supplierRaw Materials, Packaging, Services, Office Supplies
Supplier SpendTotal amount spent in this category with this supplier₹50,000.00, ₹1,25,000.00

Note: If Item Category shows "-", it indicates transactions without category assignment or data pending categorization. The Supplier Spend column may also show "-" in cases where detailed spend data is not yet calculated.

Reading the Report​

Supplier-Category Breakdown​

Each supplier may appear multiple times in the report if they supply different item categories:

Example:

  • Rajesh Arora - Raw Materials: ₹5,00,000
  • Rajesh Arora - Packaging: ₹1,50,000
  • Total Rajesh Arora Spend: ₹6,50,000

Sum all rows for a supplier to calculate their total spend across all categories.

Category Analysis​

Scan the Item Category column to identify spending by category across all suppliers:

Example - Identifying Raw Material Spend:

  • Supplier A - Raw Materials: ₹5,00,000
  • Supplier B - Raw Materials: ₹3,00,000
  • Supplier C - Raw Materials: ₹2,00,000
  • Total Raw Materials Spend: ₹10,00,000

This reveals which categories consume the most procurement budget and where consolidation might reduce costs.

Analyzing Supplier Spend​

Top Supplier Identification​

To identify your largest suppliers:

  1. Export report to Excel
  2. Create pivot table with Supplier Name in rows
  3. Sum Supplier Spend across all categories
  4. Sort descending by total spend

Your top 5-10 suppliers typically represent 60-80% of total spend (Pareto principle). These are your strategic suppliers requiring relationship management and formal contracts.

Spend Concentration Risk​

Calculate supplier concentration:

Top Supplier Spend Percentage = (Largest Supplier Total Spend / Total Company Spend) × 100

If any single supplier exceeds 25-30% of total spend, you face concentration risk. Supply disruption from that supplier significantly impacts operations. Consider diversifying to additional suppliers.

Category Spend Analysis​

Group spending by category to understand:

  • Which categories represent largest spend requiring sourcing focus
  • Number of suppliers per category indicating fragmentation or consolidation
  • Category-specific supplier relationships for negotiation leverage

Example: If Raw Materials shows 15 different suppliers with small individual spends, consolidating to 3-5 suppliers may improve pricing through volume leverage.

Common Scenarios​

Scenario 1: Annual Supplier Review​

At fiscal year-end, run the report for the complete year. Export to Excel and calculate each supplier's total spend. Rank suppliers by spend to identify top 10 strategic suppliers. Schedule Quarterly Business Reviews (QBR) with top suppliers. Use spend data in negotiations to demonstrate volume and importance.

Scenario 2: Category Sourcing Strategy​

Procurement team runs report quarterly for specific category (using post-export filtering). Identifies all suppliers in that category with individual spend amounts. Evaluates if too many small suppliers indicate fragmentation. Develops category strategy to consolidate to fewer suppliers for better pricing and terms.

Scenario 3: New Supplier Onboarding Decision​

Before onboarding a new supplier for an existing category, run the report to see current supplier spending in that category. Evaluate if adding another supplier makes sense or if existing suppliers should receive additional volume. Avoids unnecessary supplier proliferation and administrative overhead.

Scenario 4: Supplier Negotiation Preparation​

Before entering contract negotiations, run report for trailing 12 months filtered to that specific supplier. Calculate total spend and category breakdown. Use this data to demonstrate your value as a customer and request volume-based pricing or improved terms.

Handling Missing or Incomplete Data​

Understanding Blank Values​

If you see "-" in Item Category or Supplier Spend columns, this indicates:

Item Category = "-"

  • Purchase transactions not assigned to any category
  • Items in master data lacking category assignment
  • System configuration incomplete
  • Fix: Update item master data with correct categories

Supplier Spend = "-"

  • Calculation still in progress (refresh report)
  • No transactions in selected date range for that supplier-category combination
  • Data inconsistency requiring system support investigation

Work with your system administrator to ensure all items have proper category assignments for accurate spend analysis.

Export and Analysis​

Excel Export for Deep Analysis​

Export the report to Excel for advanced analysis:

Pivot Table Analysis

  • Rows: Supplier Name
  • Values: Sum of Supplier Spend
  • Result: Total spend by supplier ranked descending

Category Pivot

  • Rows: Item Category
  • Values: Sum of Supplier Spend
  • Result: Total spend by category

Trend Analysis

  • Run report for multiple quarters
  • Export each quarter's data
  • Compare quarter-over-quarter to identify spending trends

Visualization​

Create charts in Excel from exported data:

  • Pie Chart: Top 10 suppliers by spend percentage
  • Bar Chart: Spending by item category
  • Waterfall Chart: Period-over-period spend changes by supplier

Items - Update item categories for accurate reporting

Quick Tips​

Best Practices

Run this report quarterly and compare results to prior quarter to identify spending trend shifts requiring investigation.

Ensure all items have proper category assignments in item master data before relying on category spend analysis for strategic decisions.

Calculate supplier concentration ratio annually - if any supplier exceeds 30% of total spend, develop contingency sourcing plans.

Need help? Contact support at support@bizconnekt.com