7 Common Procurement Mistakes to Avoid

When we asked procurement leaders what advice they would give to aspiring business leaders, most of them highlighted the necessity of beginning your procurement strategy early.

And it makes sense 

Without a solid procurement foundation, you can't be aware of the kind of product you are really building.

For example, if you want to deliver top quality to your customers, you need suppliers who are capable of providing you with the best service.

But…what happens when things aren't planned properly? 

What happens when there's no plan?

Well, you are preparing yourself and your company to face a long list of mistakes.

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Why Procurement Mistakes Happen?

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What are the odds of saying: I made a mistake, I'm so happy about it?

Few? 

Zero?

The truth is, nobody likes to make mistakes, but even for the better managers, sometimes things can get out of control. 

Procurement is a complex task; there are so many changes and so many processes going on at the same time, sourcing, checking suppliers, requesting information, managing contracts…

The list just never ends 

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So if someone makes a mistake or if you're still using manual processes, then it's normal to see miscommunication-related problems. Maybe you didn't properly record your supplier’s past performance, and now you are feeling clueless about whether the partnership should continue or not.

Or maybe- and this is a bit more worrisome- your company lacks a clear procurement strategy.

The exact reason could change, especially if you're part of a quite special industry.

The good news? 

Most procurement mistakes are preventable.

And the road begins by learning the most common ones.

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The 7 Most Common Procurement Mistakes 

Inadequate supplier evaluation 

Yeah, this is a big one.

Choosing the wrong suppliers can seriously harm your operations. 

Perhaps they don't deliver the quality you were expecting, maybe they take just too long, or worse, they don't follow ethical labor practices, and your company ends up tangled in a messy public trial.

The outcomes are all negative; if repeated, it could become a serious problem for your company.

And yet many procurement teams get excited and rush the evaluation process or rely too heavily on old supplier relationships without considering new, better alternatives.

The result? 

Late deliveries, poor product quality, and unexpected costs that could have been avoided.

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Maybe at the very beginning, you found a great option, offering your business a competitive price and it was normal to think: This is a wonderful alternative.

But if you dig a little deeper, you would find that the wonderful supplier has had a lot of complaints with previous clients.

Or perhaps you skipped a background check and later discovered hidden financial or compliance issues.

These missteps can lead to bigger problems, like production delays or even reputational damage.

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How to avoid this?

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• Do Your Research: Look beyond pricing and check their track record, financial stability, and reputation. Industry reviews, case studies, and references can give you a clearer picture.
• Assess Performance Metrics: Set key performance indicators like delivery times, defect rates, and responsiveness. A supplier might offer great prices, but if they can’t meet deadlines, it’ll cost you more in the long run.
• Diversify Your Supplier Base: Relying on just one supplier is risky, because things happen, from natural disasters to financial crises, nothing is too far-fetched. Having backup suppliers is how you guarantee business continuity.

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Non-compliance with processes

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We get it

Sometimes when you or your team are in the middle of an important project and need to get things done, following a structured process might feel like an extra chore.

That doesn't mean you should skip the rules.

At least, not if you want to avoid a complete procurement disaster.

When established processes aren’t followed, whether due to time pressure, lack of awareness, or just cutting corners, it can lead to budget overruns, compliance violations, or even legal trouble.

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At first, it might not seem like a big deal, but over time, these shortcuts can lead to overspending, poor supplier accountability, and even regulatory penalties.

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How to avoid it?

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• Educate Your Team: Not everyone in your company understands procurement rules. Regular training on policies and best practices helps to promote compliance.
• Keep Policies Simple and Accessible: If your procurement policies are buried in a 50-page document that no one reads, don’t expect compliance. Make them clear, concise, and easy to find.
• Use Procurement Software: Technology is here to make everyone's lives easier but automation makes it harder for people to bypass required steps. With approval workflows and audit trails, there’s less room for human error.

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Poor contract management 

Contracts are made for a reason.

They should list and specify all your requirements, protecting your business from any breaches.

But what happens when you see a contract as just any regular document and forget about it?

Problems, that's what happens.

If you aren't actively managing a contract with a supplier, you could be putting your company in a risky position.

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That pesky delay from one of your suppliers that paused your operations for a month could have been prevented by setting specific terms and penalties on the contract you both signed.

Without regular contract reviews, small oversights can turn into expensive problems.

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How to prevent it?

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• Centralize Your Contracts: Keep all agreements in one easy-to-access place. A contract management system (CMS) can help track key dates, renewal deadlines, and compliance requirements.
• Monitor Supplier Performance: Regularly check if your suppliers are meeting their obligations. Are they delivering on time? Are they maintaining agreed-upon quality levels? If not, hold them accountable.

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Overspending without noticing.

Ideally, businesses would always follow their budget and stick to the amounts there no matter what.

Ideally, that's it.

In the real world?

Procurement overspending happens more often than not, and your company could be seriously affected by it, because you won't notice until it's too late.

Small price increases, hidden fees, or unnecessary purchases can quietly drain your budget before you even realize what’s happening.

Perhaps a supplier that you trust is secretly increasing their prices, taking advantage of your relationship with them, or maybe someone in your procurement department is making unauthorized purchases.

Whatever the cause, overspending can really impact profitability and efficiency.

How to prevent it?

• Set Clear Budget Limits: Make sure every department knows their spending limits and sticks to them. Pre-approved budgets help prevent surprise expenses
• Review Supplier Pricing Regularly: Just because you agreed on a price two years ago doesn’t mean it’s still competitive. Benchmark costs regularly and renegotiate when necessary.
• Require Purchase Approvals: Implement an approval process for larger purchases to ensure unnecessary spending is caught before it happens.

Not automating processes 

There's nothing wrong with an old-fashioned spreadsheet but the more your operations expand, the more complicated it gets to keep a clear record of everything.

Think about it: a lost email can delay an urgent order, a miskeyed number can result in an overpayment, and chasing approvals through endless email chains.

That's a huge headache

Manual processes have so many downsides that they might be part of the reason why procurement has such a bad reputation.

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How to prevent it?

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• Set Up Approval Workflows: Automated workflows ensure purchases go through the right checks before being finalized, reducing the risk of unauthorized spending
• Use Data Analytics: Automated systems can track spending trends, flag inconsistencies, and provide real-time insights to help you make smarter purchasing decisions
• Integrate with Other Systems: Connecting your procurement system with finance and inventory management software keeps everything aligned and reduces duplicate work.
• Invest in Procurement Software: A good procurement system automates approvals, tracks spending, and keeps all your purchase orders in one place.

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Lack of procurement goals.

How can you work for something when you don't know what it is?

If you've ever made a rushed decision regarding a purchase or felt like you are running out of time to choose a supplier, then you might have a problem with your procurement foundations.

No defined procurement goals are like going around rush hour blindly. You could believe that finding the cheapest option is the only thing that matters or that a really unnecessary purchase is beneficial for the business, without paying attention to the big picture, you are leading yourself to a path full of inefficiencies.

How to prevent it?

• Define Your Priorities: Is your main goal cost savings, supplier diversity, sustainability, risk reduction, or something else? Set clear targets to guide purchasing decisions.
• Align Procurement with Business Strategy: Work closely with leadership to ensure procurement supports overall company goals, not just short-term savings.
• Measure Performance with KPIs: Track key metrics like cost savings, supplier performance, procurement cycle time, and compliance rates to stay on course.
• Communicate Goals to Your Team: If procurement objectives aren’t clear to everyone involved, they won’t be followed. Regular meetings and training can help keep everyone aligned.

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Poor supplier relationships 

This is another common mistake made by businesses.

Yes, suppliers provide you with something, but that doesn't mean you shouldn't consider them as key partners of your company.

Just like with anyone else 

If you want to build a productive relationship with your suppliers and be confident that they got your back when it's needed, you must invest in the way you two behave with each other.

Ignore them, and you might find yourself dealing with supply chain disruptions, poor service, or missed cost-saving opportunities.

When suppliers don’t feel like partners, they have little incentive to go above and beyond for your business.

How to prevent it?

• Communicate Regularly: Don’t just reach out when there’s a problem. Check in periodically to discuss performance, upcoming needs, and potential improvements.
• Treat Suppliers Fairly: Paying on time, being transparent about expectations, and honoring commitments go a long way in building trust.
• Evaluate Performance Together: Instead of just sending a scorecard, have open discussions about what’s working and what needs improvement.

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The Lesson: Mistakes Happen 

Whether it’s choosing the wrong supplier, failing to follow processes, or overspending without noticing, mistakes are going to happen one way or another. Small missteps can quickly turn into big problems.

However, not everything is so depressing 

Following the right strategies when it comes to choosing a new supplier can save you from the pain of working with an unreliable supplier later.

Using automated process helps you to have full visibility of what’s going on your supply chain and improves the outcome of your procurement activities, and let’s not forget about how important it is to rely on loyal partnerships with suppliers. 

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