11% of contract value leaks after signature

11%

The average share of contract value organisations lose after the contract is signed, according to World Commerce & Contracting (WorldCC) [1].

Most of the loss happens after the savings have been reported and the contract has been filed away. Price escalation clauses trigger automatically, and index-linked increases are often applied incorrectly. Agreed price reductions aren’t always enforced, and negotiated volume discounts often don’t appear on an invoice. Auto-renewals also roll over on outdated terms when someone misses the notice period.

The invoices carrying these errors usually get approved and paid, so accounts payable has no reason to question them. Procurement has typically moved on at signature, and the teams managing delivery are rarely briefed properly on what the contract promised. With contract data spread across an average of 24 systems [2], very few people can easily compare what was billed with what was agreed.

WorldCC estimates a lower-complexity organisation with $500 million of contracted spend may be losing up to $15 million a year, or $75 million or more if its contracts are more complex [1]. Most organisations do not formally track value leakage at all [1], so the real figure may be even higher.

The checks that do happen usually come through a later audit, once the money has been paid and is much harder to recover. RedOwl is built to check invoices against contract terms before they’re paid.

When did anyone last check your supplier invoices against the contracts they’re meant to reflect?

Sources

  1. World Commerce & Contracting (WorldCC), in partnership with Ironclad. Closing the procurement value gap: How smarter contracting can prevent 11% value leakage. 2026. https://www.worldcc.com/static/88fffe38-ee53-49da-904c696d0030219d/Procurement-value-gap.pdf
  2. World Commerce & Contracting (WorldCC). Contract Management: An Overlooked Driver of Business Agility and Financial Performance. 2025. https://info.worldcc.com/contract-management-aug-2025