I’m on my way up to Seattle for a series of customer and prospect visits, as well as a fun dinner with one of our most successful customers. It’s always great to hear from customers directly and let them tell their story of Coupa.

I picked up the San Francisco Chronicle at the airport and noticed two stories of note. The first one was about Groupon, a great Chicago-based startup, that is helping consumers spend smarter by aggregating people who are interested in a deal. If enough people join in on offer, such as half-price discount at a local spa or an indoor skydiving facility (fun!), then you get it. It’s pretty awesome.

The other story was less awesome, but certainly has additional learnings for smarter spending. The City of San Francisco asserts that their office supply vendor, Office Depot, hasn’t lived up to its contract and has overcharged the City 31% over the last 4-plus years. That’s millions of dollars. The City has said that employees didn’t receive contracted discounts, plus there were unauthorized price increases. Not putting all fault on the vendor, the City has blamed itself for not having sufficient controls on verification of items and prices before paying the invoices.

Now, Office Depot disputes some of these assertions, so this isn’t cut and dry. But it’s clear that spending smarter techniques weren’t employed. At the transaction level, was 2-way or 3-way matching being used to ensure the City pays only for what was ordered and not a cent more? Was the proper contract number being automatically associated with every order and communicated to the vendor? Were orders being directly interfaced into the vendor’s system to avoid human error? And then strategically, why did it take so long (4.5 years) for an audit? In fact, why weren’t their controls, alerts, budgets and more to uncover the overspend after a couple months?

Of course, we use Coupa internally for all of our purchasing. Within seconds, I can tell if prices on our Macbook purchases are going up or down. I know that every invoice that doesn’t match to a purchase order is going to get scrutiny. And as a team, we look at our reports, controls, benchmarks and budgets on a weekly (if not nightly) basis to ensure that everything is proceeding smoothly.

I’m sure more information is going to come out about the City of San Francisco story, but I hope that companies take this warning seriously. Every company and organization has the opportunity, and frankly the responsibility, to make sure this event doesn’t happen to them.