Philipp Rosenauer
Partner Legal, PwC Switzerland
Caitlin Hemminga
Associate | Data Privacy | ICT | Implementationᐩ, PwC Switzerland
The past few years have highlighted the necessity for organisations to offer solutions that are time and cost effective to be successful.
Contract compliance is a series of checks and procedures that ensure that contracts conform with the relevant regulations and terms. Some of the common challenges with contract compliance include, but are not limited to, its time-consuming nature, a lack of oversight, and evolving standards and regulations.
This post explores five steps on how organisations can improve contract compliance, enhance visibility and ensure that it is a streamlined process.
1. Stay up to date with market trends
Given that current markets are spread across multiple geographies and currencies, keeping up with any changes and tracking global contracts is no easy task. Contracts are driven by these dynamic markets, so it is vital to ensure that, within contract negotiations, escalation and de-escalation contracts are in place that connect to market parameters like foreign exchange.
Contract negotiations are opportunities to leverage savings opportunities. This would not be successful if organisations were out of touch with market trends and its changes.
2. Clearly define benchmarks for successes
To measure success and areas for growth, each organisation must define targets that identify success in contract compliance. Quantifying such measures may be a time-consuming challenge to first establish, especially if there are copious amounts of contract data spread across the organisation. Once these benchmarks have been established, it becomes an effective tool that tracks and measures contract compliance and identifies business units that need further support or attention.
3. Foster an efficient internal system for audits
Analysing post-spend data is crucial in identifying any lost opportunities from contract non-compliance. To do so effectively, an organisation needs infrastructure that is visible and transparent to all those involved. As such, transparency is key in auditing organisational success and challenges. Basic areas to improve visibility could be currency change and conversion or clerical errors, to name a few.
4. Establish contract templates
Having standardised contract creation ensures faster contract creation. Nevertheless, contracts cannot be static because of changes to regulations or industry and must be constantly monitored and adapted. However, by defining mandatory clauses and creating templates based on specialisms and geographies, it ensures a thread throughout an organisation and a streamlined process of contract creation.
5. Create standard workflows for contracts
Bringing together the relevant stakeholders is best streamlined through a standard workflow throughout the organisation. As such, through standardisation, the process of amending and drafting contracts can be more efficient and reduce ambiguity.
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