Direct vs Indirect Spend: Definitions and Why They Matter

A SAP Concur blog post explains the difference between direct and indirect spend: direct spend is tied to producing goods or services and affects cost of goods sold (COGS) and profit margins, while indirect spend supports operations without directly contributing to production, including employee travel and expenses (T&E), and is decentralized, frequent, and harder to track and control. The post states that companies adopting an integrated travel and expense (T&E) solution see 21% savings in travel bookings and expense reporting, 20% lower invoice processing costs, and a 26% increase in policy compliance.