The three hidden costs in your supplier contracts

You negotiated a good deal. The price was right, the terms reasonable. But 18 months later you're paying significantly more than you expected. What happened?

1. Index clauses that tick away silently

Most supplier contracts contain an index clause that allows annual price increases based on CPI or other indexation. In itself it's reasonable — but when inflation is high, these clauses can result in 5–10% price increases per year without you actively approving it.

What you can do: Identify all contracts with index clauses and evaluate whether the actual price increase is reasonable. In many cases, you can negotiate a cap or an alternative indexation model.

2. Automatic surcharges

Setup fees, licence fees for additional users, support packages and integration fees. These often appear as separate line items on invoices — items that are not always clearly regulated in the main contract.

What you can do: Match every invoiced item against the contract. If an item lacks contractual support, you have the right to dispute it.

3. Volume discounts that are never activated

You negotiated a volume discount at a certain threshold. But no one follows up on whether the threshold has been reached. The result: you pay full price even though you have qualified for a discount.

What you can do: Connect your contract data to actual purchasing volume and flag when discount thresholds are passed.

"We had volume discounts in three contracts that had never been activated. It amounted to almost SEK 150,000 per year that we were entitled to but never received."

Summary

These three hidden costs — index clauses, surcharges and unrealised discounts — occur in most supplier portfolios. By systematically reviewing your contracts and matching them against actual invoices, you can identify savings of 5–15% of your total procurement costs.