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Procurement · Definition

Cost Avoidance

Savings from preventing a cost increase rather than reducing current spend.

Cost avoidance is the value of a cost you did not incur — a proposed price rise negotiated down, a penalty averted, a specification simplified before purchase. It never shows up as a lower invoice.

Because it does not reduce budget spend, finance treats it more sceptically than hard savings. Claiming it credibly requires documenting the baseline you avoided before the negotiation, not after.

Also called

  • soft savings

Cost Avoidance is not just a definition here

Procurement runs on this vocabulary every day in AWRA OpsHub — 40 of our 257 glossary terms describe things the platform actually does.