Tail spend refers to the small, infrequent purchases that collectively account for a substantial portion of transactional activity but a minimal percentage of total expenditure. These purchases typically follow the Pareto principle, where 80% of procurement transactions contribute to only 20% of the total spend. Tail spend categories often include office supplies, low-value spare parts, and ad hoc services.
The challenge lies in managing these purchases effectively, as their decentralized nature often leads to inefficiencies, lack of visibility, and increased costs.

Tail spend is typically composed of:
- Low-value transactions: Small purchases that individually seem insignificant but collectively impact costs.
- Diverse suppliers: Many suppliers with limited transaction frequency.
- Non-strategic categories: Items not prioritized in strategic procurement plans.