When trade spend programs leak margin, it is rarely because the team is not paying attention. The conditions most teams are working in make prevention genuinely difficult. During a recent conversation with IFMA, Dean Rallo, Solutions Advisor at iTradeNetwork explored what actually gets in the way of catching errors before they become losses.

The Timing Problem Comes First

For many organizations, the opportunity to prevent a bad claim from being paid has already passed before anyone has had a chance to look at it. Payment terms like net ten create an obligation that arrives faster than any realistic review cycle. When a meaningful share of claims come in as deductions, the funds are already gone by the time the invoice surfaces. Teams are left reconciling after the fact, and the work shifts from prevention to recovery.

"We're always playing catch up," Rallo said. "We're always trying to balance between upsetting a valid business partner and the timing of when the payments are due."

That dynamic does not get resolved by working harder within the same process, but rather by building a process that accounts for the timing constraints from the start. One where data is normalized quickly enough that exceptions surface before obligations are locked in.

Messy Data Is Where Prevention Breaks Down

Even when timing is manageable, the data creates its own barrier. Claim files arrive in different formats depending on the partner, and getting that information into a usable state takes real effort before any actual validation can happen. The question Rallo raises is not whether the data arrives, but whether it arrives in a form the team can act on.

For teams relying on analysts to manually work through files and flag potential double dips or product mismatches, the identification process is slow by design. Manual review will always have gaps, and those gaps are where preventable leakage hides. If the internal process cannot keep pace with the volume, the key is to find a partner that specializes in it. Trying to absorb that complexity without the right infrastructure is not a problem that more effort will solve.

Prevention Starts at the Contract

The most effective point of prevention is earlier in the funnel than most teams focus on. Contracts establish the terms that everything downstream validates against. If those contracts are incomplete or never monitored after signing, the reconciliation process is checking claims against a baseline that may no longer reflect reality.

Rallo pointed to a scenario that surfaces regularly: contracts that were put in place with real budget behind them and then never claimed against. "What happens if no one ever claims on that contract?" he asked. "All of a sudden, you realize that you have some percentage of contracts that everybody pushed to create, that you budgeted for, that are never getting used."

Identifying dormant contracts is a preventive act in itself. It gives sales a reason to re-engage with those partners and gives finance visibility into budget sitting idle. When both teams are working from the same picture, the kind of drift that leads to unclaimed or misclaimed contracts becomes easier to catch before it compounds.

What Prevention Requires

Rallo framed the practical side of prevention as a set of questions every team should be able to answer: Is the claimant entitled to what they are claiming? Is the product on the contract? Is the same transaction being claimed more than once?

If the current process cannot answer those reliably, there is leakage happening that has not been identified, let alone prevented. The data needed to answer them is already coming in through the claim files. The gap is in having the infrastructure to surface it fast enough to act before the payment window closes.

"It'd be a shame not to harness all the data that's hiding in there and push it out to the front line," Rallo said. "It's your data. You just gotta maximize it."

To hear the full conversation, including the discussion on controlling margin leakage and recovering lost revenue, you can access the complete webinar on demand.

If you want to know where your program is most exposed, our 30-second Trade Spend Program Health Check is a quick way to see if you have gaps.

To build a process that catches errors before they move through the system, schedule time with an iTradeNetwork trade spend expert to talk through what that looks like for your organization.

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