Why clean procurement processes create friction on one-time needs — and how the single creditor model cuts process costs without giving up control.
Procurement processes have a clear purpose: to make purchasing controllable, economical, and traceable. Suppliers are vetted, orders approved, terms documented, invoices processed correctly. What gets bought, from whom, and on what terms should not be left to chance.
On paper, that logic holds up. In everyday work, the same process can still feel wrong. A department needs a €250 spare part on short notice. A project team needs a service that only one specific provider offers. The need is clearly defined, yet this is often where the real process begins: Is the supplier already set up? Who is allowed to create the vendor record? Which checks are required? Can the provider even be handled through the regular purchase-to-pay process?
Suddenly the administrative effort bears no relation to the actual need. That is not proof the procurement process is bad. This is a structural dilemma of many procurement organizations: processes designed for plannable, recurring purchasing meet a workday that consists to a considerable extent of exceptions.
Modern procurement processes did not get complex by accident. As companies grow, so do the demands on procurement and accounts payable: companies need to know who they do business with. Master data must be correct, compliance requirements met, invoices unambiguously assigned. Add internal rules: budgets, approval thresholds, category strategies, framework agreements.
Each step can make sense on its own. It becomes a problem when the same logic applies regardless of a purchase's type, value, and frequency. From a process perspective, a new supplier is simply a new supplier. Economically, there is a world of difference between a strategic supplier with several million euros in annual volume and a provider used once for a €300 product. The administrative infrastructure often treats both cases more alike than their economic significance justifies. Here the gap between process logic and process reality opens.
Procurement talks a lot about prices, terms, and savings. For small and one-time purchases, however, the decisive cost factor is often not the purchase price but the process cost.
A need has to be specified. If the provider is not yet in the system, vendor master data must be recorded and verified. Company policy may add compliance checks, approvals, and ERP setup. Then come the purchase order, goods receipt or service confirmation, invoice verification, payment.
Much of this effort is fixed: an order for €250 or for €25,000 barely changes the administrative baseline. For small purchases, process costs can become disproportionately high relative to order value. One-time needs are economically relevant not because they move much money, but because they tie up outsized resources for comparatively little purchasing volume.
Strategic procurement traditionally works through concentration: bundle volumes, consolidate suppliers, sign framework agreements, negotiate terms. The higher and more regular the volume, the greater the leverage.
But not every need can sensibly be bundled. Below the large strategic suppliers, many companies carry a long tail of small, rarely used, or one-time providers. Each is economically negligible on its own; together, they still generate considerable administrative effort. Why companies have so many suppliers in the first place is rarely a question of poor organization: a specialist provider is brought in because a concrete need arose that existing suppliers cannot reasonably cover.
The exception cannot be eliminated entirely. The real question is how expensive companies make it organizationally.
At this point another effect appears: people optimize their workday. Anyone forced through a process that subjectively feels far bigger than the purchase itself looks for an easier way. An order goes to the familiar supplier even though another provider would be the better technical fit. A corporate credit card is used, employees pay out of pocket, or the purchase happens entirely outside the intended process.
From the company's view, the familiar problems follow: maverick buying, missing transparency, inconsistent data, less control. The obvious reaction is usually to tighten compliance with the procurement process. That falls short. When employees keep bypassing the same step, the question is not only why they are not following the process, but why it creates so much friction at this point that people go looking for a detour.
Behind this sits a distinction we cover in depth elsewhere: process compliance is not the same as process efficiency. A transaction can run fully by the rules and still be unnecessarily expensive. The quality of a procurement process is measured not only by whether every step was followed, but by the effort it took to reach the desired level of control.
The classic answer to special cases is more rules: simplified approvals for small orders, special processes for certain categories, separate policies for credit card payments. That solves individual problems but adds complexity across the process landscape. The alternative: standardize not the exception itself, but its administrative handling. Which specialist provider will be needed six months from now is hard to predict. How such providers are processed can very well be standardized.
This is where Pedlar's single creditor model comes in. The idea is not to abolish purchasing rules or give business units a path around procurement. What changes is the level at which standardization takes place. Traditionally: new supplier, new creditor, new master data, new checks. In the single creditor model, the company instead works with one central billing partner in its own accounts payable. Pedlar, as a managed service, takes over ordering and payment; the choice of provider stays with the company, and delivery comes directly from the provider. Many external one-time suppliers become, internally, a single creditor, settled through a consolidated invoice.
This separates two levels that are coupled in the classic process: purchasing flexibility and administrative supplier complexity. A department can use a specific provider without creating a creditor its own system then has to maintain indefinitely. Compliance requirements remain the company's requirements — the model ensures they need not be run through again for every new provider.
The Witzenmann example shows the size of the effect: around 300 one-time needs per year, with an average order value of about €260. Before optimization, each transaction could generate internal process costs of up to €140, more than half the order value. Across 300 transactions a year, that is a relevant cost position, even though no single need draws much attention.
With the single creditor model, process costs in this area fell by around 85%, which yields annual savings of around €35,700 and an ROI of 3.3. The business case, in other words, comes not primarily from lower purchase prices but from fewer internal resources tied up in administrative work.
Behind this is a broader cost logic: total cost of procurement, meaning every cost incurred for a need to actually arrive in the company and be processed correctly. A provider that is €30 cheaper but must be newly set up and fully processed administratively can end up the more expensive one. A model that lowers this administrative barrier to entry also improves competition: business units and procurement can decide more on technical and economic merits.
Not every purchase needs the same path. A strategic supplier needs a different organizational framework than a one-time supplier. Four questions show whether unnecessary friction is building up in your organization:
The last question is especially telling: process quality cannot be judged from a process diagram alone. You have to watch what people actually do.
Would you like to discuss how much process cost is hiding in your one-time needs? Schedule a call →
