Knowledge Base
Spend Analysis
Spend analysis is the discipline of collecting, cleaning, and categorizing an organization's purchasing data to show what it buys, from which suppliers, and at what prices.
How spend analysis works in multifamily
The inputs are the AP ledger and the paid invoices. The work is cleaning and categorizing: normalizing vendor names, assigning every purchase to a category, and building per-unit and per-property views so properties of different sizes can be compared honestly. The output answers three questions — what does the portfolio buy, from which suppliers, and at what prices. The National Apartment Association's 2024 Income/Expense IQ data, which puts total operating expenses at $8,657 per unit, is a useful external yardstick for the first pass; see multifamily operating expenses per unit for how those categories break down.
GL codes are too coarse for the question that matters
Ledger-level analysis can rank categories and flag growth, but a GL code records where a dollar was booked, not what it bought. A repairs line in the ledger cannot tell you which parts were purchased or what each one cost, because that detail was collapsed at coding time. Real spend analysis has to descend to the invoice line, where items, quantities, and unit prices live. This is the difference between knowing spending rose and knowing which of it was overpriced — see what a multifamily invoice audit involves.
What to do with the findings
Spend analysis is diagnostic; the return comes from acting on it. Consolidate scattered purchasing to fewer suppliers to concentrate volume. Renegotiate or re-source the categories where prices run above market. Then re-measure next quarter, because prices move and vendors notice when no one is checking. Operators who want this as a standing discipline rather than a one-off project run it on a cadence — the model The Benchmark is built around, pricing every R&M invoice line against verified suppliers each quarter.
Related terms
Start with one property and one quarter
Send us a quarter of invoices and we will show you what it should have cost. If there is nothing there, we will tell you that too.
