The Procurement Glossary » Spend Taxonomy

Spend Taxonomy

Spend & Analytics

Definition

A structured, hierarchical classification scheme used to organise spend into consistent categories.

Explanation

A taxonomy (custom or standard like UNSPSC) defines the buckets spend is sorted into, from broad families down to specific items. A consistent taxonomy is what makes spend comparable across time, sites and systems.

Example

The three-level taxonomy rolls 'A4 paper' up to 'Paper' up to 'Office Supplies' for reporting.

Related terms

• Spend Classification — The categorisation of each transaction into a consistent taxonomy so spend can be analysed by category.
• UNSPSC — The United Nations Standard Products and Services Code — a global taxonomy for classifying products and services.
• Spend Cube — A multi-dimensional view of spend data allowing analysis by supplier, category and business unit simultaneously.
• Category Management — Managing related groups of spend as strategic business units, each with a tailored strategy and dedicated ownership.

Frequently Asked Questions

What is Spend Taxonomy?

A structured, hierarchical classification scheme used to organise spend into consistent categories. A taxonomy (custom or standard like UNSPSC) defines the buckets spend is sorted into, from broad families down to specific items. A consistent taxonomy is what makes spend comparable across time, sites and systems.

Can you give an example of Spend Taxonomy?

The three-level taxonomy rolls 'A4 paper' up to 'Paper' up to 'Office Supplies' for reporting.

Back to the procurement glossary | Procurement concepts | Contact us