Insight
Contract coverage rate: how much of your spend is genuinely under contract
The contract coverage rate measures the share of a category’s spend that is genuinely governed by a contract. It sits in no table: you have to link the contract to the order, the order to the invoice line, and count as uncovered whatever no contract governs. Insight computes it by category and by entity.
The problem
A supplier on record is not covered spend
Most organisations know how many contracts and how many approved suppliers they have. Very few know what share of the euro spent actually fell under one of those contracts. These are two different measures: one counts documents, the other counts spend.
The gap comes from everywhere. A framework agreement signed by the group but never rolled out in two subsidiaries. A category bought directly by operations, outside the framework. A contract that expired eight months ago and on which orders keep relying. A service invoiced off-schedule, next to a correctly priced item, on the very same invoice.
A declared rate is built from what you believe you have covered. A calculated rate is built from the spend itself, line by line. The two rarely look alike, and it is the second one that decides where the negotiation effort should go.
What has to be connected for the rate to exist
The calculation is a division. Its difficulty is not arithmetic: it lies in tying every invoiced line to the contract that governs it, or in establishing that none does.
On the numerator, the spend whose every line is tied to an applicable contract; on the denominator, the total spend of the scope. Both terms have to stay readable separately: a rate that rises because the denominator was narrowed is not an improvement, and the only way to see that is to show both.
- The contract, and the scope it applies to
- A contract covers something specific: references or a category, one or several legal entities, between two dates, amendments included. Until that scope is explicit, no line can be tied to it with any certainty.
- The purchase order, where one exists
- The order states what was committed and on what terms. An invoice without an order is not necessarily off contract: it is simply harder to tie back, and that is exactly where the rate quietly degrades.
- The invoice line, never the header
- One invoice carries covered lines and lines that are not: an item on the rate schedule and a service outside it. A rate computed at document level means nothing at all.
- The supplier brought back to its group
- The contract is signed by one legal entity and the invoice issued by another, within the same group. Without entity resolution, covered spend is counted as uncovered, because the two names never meet.
- Whatever no contract governs, counted as such
- Absence is information. A line with no applicable contract enters off-contract spend, with its amount, its supplier and its category. Nothing is set aside in silence, and nothing is tied back on a similarity of wording.
- The period, amendments included
- A contract covers a window, and its amendments move it. A January invoice may fall under amendment 2 and a March one under amendment 3, at different prices. The rate is computed against the version applicable on the invoice date, never against the last one signed.
This calculation is only possible because the procurement graph already carries those relationships: contract, amendment, price list, order, goods receipt, invoice, each tied to the document, the page and the line it came from.
Two reading axes, and one question about the quarter
The delay between the question and the answer. A buyer preparing a renegotiation no longer waits for a slot with the data team.
The rate reads by category (where the negotiation held, where it was never applied) and by entity (which subsidiary buys outside the common framework). Both readings rest on the same relationship: the same data, aggregated differently.
- By category: the share of spend governed by a contract, and which contract governs it. A 60% rate explained by three expired contracts is not the same problem as a 60% rate with no contract at all.
- By entity: the gap between the subsidiary that applies the framework and the one buying beside it. Often the fastest room for manoeuvre, because nothing has to be renegotiated, only applied.
- For the current quarter: the share committed off contract, read on commitment rather than on what has been paid. At that stage the spend can still be corrected.
- By supplier: the share of what they invoice that falls under the contract signed with them. This is the reading that prepares a renegotiation, because it shows what is bought outside the framework from a partner already under contract.
Every rate opens onto the lines that make it up, and every line onto its document. A rate you cannot walk down to the invoice stays an opinion, and an opinion does not survive a committee. Every extracted value stays linked to the exact place in the document where it was read.
Procurement intelligence · Insight
Ask the question. It builds the analysis, and shows where every figure comes from.
Translates a question asked in plain language into a query over the graph and the procurement database, computes, and returns the useful form: a figure, a table, a curve, a dashboard. It reads, it does not write. Every value opens onto the lines that make it up, and every line onto its source document.
The delay between the question and the answer. A buyer preparing a renegotiation no longer waits for a slot with the data team.
What Insight detects
- A category whose price has been drifting for months
- A contract coverage rate falling, by category and by entity
- Credit notes outstanding, with whom and for how long
- A single-source reference with no alternative on record
- A gap between the budget for a cost line and what was actually invoiced
- An increase driven by mix or volume rather than price
- A missing figure: declared as missing, never estimated
Nothing is lost. Everything can be checked, everything can be proven.
- The contract clause and the invoice line, highlighted side by side.
- Every extracted value stays linked to the exact place in the document where it was read.
- The same case produces the same decision, today as in six months: the rules are applied deterministically.
- No discrepancy is set aside in silence. Anything that matches no rule is raised, with its reason.
- The agent records what it did, in the order it did it: who, what, how much, when.
Frequently asked questions
What is the contract coverage rate?
The share of spend within a scope (a category, an entity, a period) that is effectively governed by a contract in force, rather than merely placed with a supplier on record. Its complement is off-contract spend: the spend that escapes the prices and terms you negotiated.
Why is this rate not in our ERP?
Because it assumes a relationship the ERP (enterprise resource planning system) does not carry: the one running from the contract and its amendments to the invoice line, through the purchase order where one exists. The ERP knows who is on record and what was paid. The link between the two, line by line, still has to be established.
How do I check a Zylio conclusion?
Every discrepancy opens onto its evidence: the contract clause and the invoice line, highlighted side by side, with the calculation shown.
Does the data need to be perfectly clean?
No. The Capture agent is designed for heterogeneous documents and incomplete reference data; structuring is part of the deliverable.
Measurable impact in every environment
More than 5 million procurement documents analysed
Between 1 and 7% of margin recovered
on the scope analysed
From 15 to 45% of time given back to teams, per FTE
depending on the scope and on data maturity
Zylio fits into your existing ecosystem.
The ERP runs the process. Zylio handles the exception and recovers the value that escapes it: invoices without a purchase order, line-by-line price discrepancies, duplicates and overbilling, off-contract spend.
Your data under high security.
Zylio meets the most demanding standards, and nothing is committed without your approval.
- Certifications
- Hosting
- Encryption
- Access
Read next
- Procurement intelligenceInsight: on-demand procurement analysis, verifiable figure by figure.
- The questions to ask about your procurementThe twelve real questions, and what has to be connected to answer them.
- Connect your procurement data to Power BIThe clean datasets your reporting tool already knows how to consume.
- Price-volume-mix analysisIsolating the price, volume and mix effects behind an increase.
- Procurement analysis in-house or by a consulting firmWhat changes when the answer arrives the same day.
See what this looks like on your own data
Twenty minutes, on a spend category of your choosing. We show you what the agents detect, with the evidence behind it.
- No commitment, on your own data
- Result in 3 weeks
- 20 minutes, no sales pitch
- Your data stays hosted in France
- No change of tool or process