Compares total procurement spend to the company’s revenue to determine the efficiency of the procurement function.

What it Measures ?

How much we spend on procurement for every rupee we earn.

Relevant StakeHolders 

CFOs, Business Unit Heads

In-depth Use Case / Real-world Example

A manufacturing company that produces electrical components calculates its Spend to Revenue Ratio by dividing total procurement costs by total revenue. If the company generates ₹500 crores in revenue and spends ₹100 crores on materials, the Spend to Revenue Ratio is 20%. This ratio helps determine whether procurement spending is proportionate to the company’s revenue and if it aligns with profitability goals.