In the procurement departments of medium-sized enterprises, claims often take the form of price adjustments, surcharges or disputes regarding performance, deadlines and quality. These refer to claims arising from deviations from contracts or purchase orders, which can quickly impact margins and planning. This blog post explains what are claims in procurement, where they typically arise, and why structured claim management is particularly relevant for medium-sized enterprises.

Claim management is often confused with ‘disputes’ or ‘legal wrangling’. For medium-sized companies – particularly from the perspective of the procurement department – it is, above all, one thing: a pragmatic tool for dealing with price, performance and delivery deviations with suppliers in a legally sound manner. The aim is not to ‘prove one is right’, but to protect margins, security of supply and relationships.

What is a ‘claim’ in procurement?

A claim is a demand (or counterclaim) arising from a breach of a contract, order or agreed terms and conditions. In procurement, this is an everyday occurrence – often just without a name.

A classic example is a request for a price increase: a supplier announces a “6% increase from next month”, citing “inflation” as the reason, and expects the purchasing department to agree. From a claims perspective, this is a request that needs to be scrutinised: is there a contractual basis (e.g. indexation)? Is the calculation plausible? Which parts of the price are actually affected?

Claims typically appear in five fields in purchasing:

• Price (price increases, surcharges, currency/energy/freight components)
• Service (additional work, engineering changes, packaging/labelling, express delivery)
• Deadline (delays, additional costs due to changes to the deadline)
• Quality (rework, sorting, costs associated with complaints, downtime)
• Quantities/purchasing (minimum quantities, call-offs, forecast variances)

Claim management means handling these cases consistently: assessing them on the basis of facts, documenting them thoroughly and negotiating in such a way that a robust agreement is reached in the end.

Why is claim management so important for small and medium-sized enterprises?

In small and medium-sized enterprises, claims have a disproportionately large impact. Even a price change of just a few percentage points on recurring volumes has a direct impact on EBIT. At the same time, resources in procurement and technical departments are often stretched: claims are often dealt with ‘on the fly’, leading to inconsistencies. This is precisely what leaves companies vulnerable: giving in to a claim without proper data invites the next blanket demand.

Added to this is the reliance on critical suppliers (single/dual sourcing, specialist parts, long lead times). In this regard, the procurement department needs to adopt a firm stance without damaging the partnership.

From a purchasing perspective, where do most claims arise?

The most expensive claims rarely arise out of malice, but rather out of a lack of clarity:

If the pricing structure is not clearly defined (no indexation or escalation clauses, no defined cost drivers), every market fluctuation becomes a matter for negotiation. If changes are made ‘on the fly’, additional costs are priced in retrospectively. And if there is no supporting evidence, the only option is to discuss matters based on gut feeling, which is usually the weaker negotiating position.

In short: unclear rules + weak evidence = costly claims.

Conclusion

In small and medium-sized enterprises, claim management in procurement acts as a safeguard against creeping cost increases and unclear additional charges. Those who demand transparency, clearly define pricing structures and document decisions in a way that is easy to follow are not negotiating more aggressively, but simply more professionally.

ADCONIA – Out of the ordinary.

Consulting for purchasing, supply and value chains with a focus on cost management, digitalisation, organisational development and sustainability