Inventory Management
Procurement
Method Pay
Analytics & Reporting
Every location bought what it needed, and every invoice cleared, yet supply costs keep climbing faster than collections.
How does that happen?
Well, for a dental support organization running dozens or hundreds of locations, that gap usually traces back to one thing: purchasing that has slipped outside anyone's control.
Spend management is how a dental group keeps that from happening, directing what each location buys, from which suppliers, and at what price, so supply spend stays under negotiated terms or at least visible should it deviate from the norm.
The part that leaks the most is considered rogue spending, the orders that go through outside your approved suppliers, prices, and process. Here is where it collects across a multi-location group, and the controls that pull it back.
Spend management covers everything between deciding to buy a product and paying for it: which suppliers a location can use, what price it pays, who approves the order, and how that spend is tracked afterward.
In corporate finance, the broader version of this is called business spend management, and it applies just as directly to a dental group buying gloves, composite, and handpieces across many locations as it does to any enterprise.
For a single practice, this is manageable by hand. One office manager knows the suppliers, watches the invoices, and notices when something looks off.
Add locations, and that informal spend management breaks down. Each site develops its own supplier relationships, ordering habits, and ideas of a reasonable price. The finance team sees the total months later, with no easy way to trace where it came from.
The metric that captures how much of this you actually control is spend under management, the share of total spend that flows through approved suppliers and follows your buying rules. A low number means most of your purchasing is happening on its own, outside any policy or negotiated rate.
Raising it is the practical goal, but before you can raise that number, you have to see what is dragging it down.
Rogue spending, also called maverick spend, is any purchase made outside your approved suppliers, negotiated prices, or purchasing process. It is rarely deliberate.
Where this occurs most often is when a location runs low on a material and the usual supplier is out, so someone orders it from wherever it is in stock. A rep offers a deal in person, and the order goes in over the phone. An office manager sticks with a familiar vendor instead of the contracted one.
None of these feels like a problem in the moment, yet the damage is cumulative. Off-contract buying gives back the discounts your team negotiated, and industry research puts that leakage at roughly 5% to 16% of targeted savings lost to maverick purchasing.
Layer that on top of rising input costs, the ADA Health Policy Institute reports dental equipment and supply prices rose about 5% in a single year, and the margin you are trying to protect gets squeezed from both sides.
In a dental group, rogue spend is unusually hard to see because it is distributed. It does not arrive as one large unauthorized purchase that a controller would flag. It arrives as hundreds of small, reasonable-looking orders spread across locations, each one under the threshold that would in other cases trigger a second look.
That is why it should be considered an overarching spend management problem versus an individual issue. You cannot approve your way out of spending you never see.
The first step is knowing where to look, and in a multi-location group, the same handful of gaps show up again and again while being that much harder to trace.
Rogue spend is not random. It collects in specific, predictable places, usually where a location has an easy reason to step outside the system and no immediate consequence for doing it. These are the six that cost dental groups the most.
Your catalog (or formulary) is the list of products your group has standardized on, chosen for price, clinical fit, or both. When a location buys off that list, it is usually paying more for a substitute no one vetted. The cost shows up in more ways than the price tag:
One location drifting off formulary is a rounding error. Ten locations each doing it a little is a structural cost you carry every month.
You negotiate rates on the assumption that volume will actually go to that supplier.
Every off-contract order chips away at the commitment those rates were based on.
In practice, it looks like purchases from suppliers you never priced, volume shortfalls that put contracted discounts or rebates at risk, and pricing you already won sitting unused because the order went elsewhere.
The savings could have been real. They were just never actualized and thus never hit your P&L because the buying moved around the contract.
Not every deal happens on screen.
A rep matches a competitor's price in person, or a supplier offers a one-time promotion on a call. If there is no way to capture that in your system, the purchase becomes rogue spend by default.
Without a record, you lose any documentation of what was agreed, the ability to match the later invoice against it, and visibility for finance into a purchase that still hits the books. The deal itself might be good.
The problem is that nothing downstream, approvals, receiving, or AP, knows it happened.
Standing orders are easy to stop watching. A price ticks up a few percent, no one notices, and the new number becomes the baseline for every future order. Purchase order discipline is what catches this, because without it you have nothing to compare an invoice against:
By the time price creep is large enough to notice in a report, you have been paying it for months.
When locations cannot see what has already been ordered or what is in stock, they reorder to be safe.
But safety costs money.
Those costs come from duplicate orders placed because no one could confirm the first, rush shipping to cover a stockout, better visibility would have prevented, and overbuying short-shelf-life items that later expire and get written off.
None of it is on anyone's budget, but it ends up being the cost of buying without a shared view of what the group or location already has.
The clearest sign of rogue spend is paying different prices for the identical product across your own network.
It means each site is buying on its own terms instead of the group's.
Across a multi-location group, this looks like identical SKUs at different prices depending on who ordered, locations on legacy supplier relationships no one has consolidated, and no single view that would make the gap obvious.
Our internal data shows cost variations of 20% to 30% between locations at groups that have not centralized purchasing. That spread is unmanaged spend, location by location, and closing it is what spend management is for.
Seeing the leaks is the easy part. Closing them takes controls that act while the order is being placed, not after.
Reporting tells you what already happened. Real spend management changes what happens next, by putting the rule in the path of the purchase so the compliant option is the one that goes through. A capable dental procurement platform gives you six controls that matter here, and each one closes a specific leak from the list above.
A purchase order sets what you are buying, from whom, and at what price before the order goes out, so the price of record is yours, not whatever a supplier's site shows that day. That gives you a document to hold suppliers to and to match invoices against. It is also the reference that catches price creep, because there is a fixed number to compare each invoice to.
When approved products are marked at the moment of ordering, and a compliance percentage shows on the order itself, buyers see their number before they submit, not in a report someone else reads next month. That visibility at the point of purchase changes behavior in a way that after-the-fact reporting does not. Locations that struggle with compliance can be restricted to the formulary entirely.
Buying profiles set which suppliers a location can see and use. You can grant full access to some, limit others to view-only, or hide a supplier so it is not an option at all. That closes off the off-supplier orders behind a lot of rogue spend before they can happen, without waiting on a support ticket to change.
Static budgets tell you that you went over after the period closes. Budgets that update as orders are placed tell you while you can still act. The useful version shows, in the moment:
That turns a budget from a number you review into a control that holds.
Three-way matching compares the purchase order, the receiving record, and the invoice before payment, so you pay for what you ordered and actually received, at the agreed price. It catches duplicate invoices, quantity mismatches, and overcharges that manual review misses. At [[roughly $11 to process a single invoice manually]], the automation also takes real cost out of AP.
Analytics are where the leaks from earlier become visible and specific. Good ones let you drill from a spend spike down to the supplier, the product, and the location that drove it. That is how you find same-SKU price gaps and off-formulary drift while there is still time to correct them, instead of reading about them a quarter later.
Together, these are the controls that move spend management to the point of purchase, where it actually changes the outcome.
Finding where spend leaks is one problem. Closing it at the point of purchase is another. Request a demo to see how Method holds spend under control across every location.
Raising your spend under management is less about a single project and more about closing gaps in order. Groups that make progress tend to work in roughly this sequence.
None of these steps is dramatic on its own. Run in order, they move spend out of the gaps and back under management, which is what spend management is really measuring.
The supply spend climbing faster than collections was never one bad decision. It was hundreds of small ones, spread across locations, each too small to catch on its own and invisible in the total. That is why tightening approvals or reading last month's report never quite fixes it. Effective spend management has to reach the order before it is placed.
Method gives DSOs the controls that act while the order is placed: real purchase orders, formulary enforcement, buying rules, budgets that track in real time, and three-way matching that pays only for what was ordered and received. Together they pull distributed, off-contract buying back under negotiated terms across every location. Request a demo to see where your spend is leaking and how much of it you can bring under control.
Rogue spending, also called maverick spend, is any purchase made outside approved suppliers, negotiated prices, or the standard purchasing process. It is usually well-intentioned, someone buying what they need quickly, rather than deliberate. The cost is cumulative: off-contract buying can leak an estimated 5% to 16% of negotiated savings. In a dental group it collects in small, frequent orders spread across locations.
Make the compliant path the easiest path. Give every location a single system to order from, limit them to approved suppliers, mark formulary products at the point of ordering, and route every purchase through a PO and approval. Real-time budgets and monthly spend analytics then catch the drift that slips through. Enforcement at the moment of purchase works better than reviewing spend after the money is gone.
Business spend management is the broader discipline of controlling all non-payroll spend across an organization, and for a DSO it applies squarely to supply and equipment purchasing across locations. In practice it means standardizing suppliers and products, enforcing budgets and approvals, and analyzing spend to find savings. The dental-specific version adds formularies and clinical fit to the usual price and compliance goals. The aim is the same: more of your spend under negotiated terms, less of it running on its own.
Spend management is the overall practice of controlling what you buy and how. Spend under management is the metric that measures it: the percentage of total spend that runs through approved suppliers and follows your buying rules. A high figure means most purchasing is governed. A low one means much of it is happening outside any policy or negotiated rate, which is where rogue spend lives.
Supply spend is commonly cited in the range of 4% to 6% of collections for a well-run practice, though many land higher. One benchmark puts the average single practice at 7.2% of collections on supplies, and rising input costs push it up further. The exact target varies by specialty and case mix. The more useful move is to track your own number monthly and compare locations against each other, since a wide gap between sites usually points to unmanaged spend.
Divide the spend that runs through approved suppliers and follows your buying rules by total spend, then multiply by 100. If $7 of every $10 flows through governed channels, your spend under management is 70%. Track it by location to see where control is weakest. Watching the number over time is a straightforward way to measure whether your spend management is improving.
Yes. Smaller groups often see the fastest gains, because they pick up purchasing power and visibility they did not have as independent sites. The controls that matter, approved suppliers, formularies, budgets, and PO-based buying, scale down to a handful of locations as well as up to hundreds. Method supports both. Book a demo to see it configured for a group your size.
