Contract Auditing
Actually Reading the Contract
Many companies never see the final contract, don't know who signed it, and don't know what's in it, even when the deal is for millions of dollars.
Not knowing what is in contracts leads to all sorts of problems for both buyers and sellers. Contracts expire. Terms are never performed. Companies purchase products and services they already have. Providers get locked into supporting products at last year's prices. Public statements made by customers about their corporate governance, such as IT security measures, and public statements made by business services providers about current customers and annual revenues, are not backed up by the agreements. Problems and delays arise during due diligence in mergers and acquisitions.
Re-Discovered Revenue and Cost Savings
Simply reviewing existing contracts can do amazing things for a company. Unrealized revenue for sellers and cost savings for buyers can be recouped:
- Sellers-Enforce payment terms. Identify additional business outside project scopes. Exercise pricing adjustments.
- Buyers-Enforce acceptance criteria. Identify instances of double billing. Exercise spending caps and most favored nation pricing.
James River's Contract Auditing Process goes beyond terms and conditions. Our auditing process builds strategies for successfully enforcing, renegotiating, or ending existing contracts.
James River's Contract Auditing Process
Missing SOX Compliance
Contracts are at the front line in any company's battle to comply with Sarbanes Oxley (SOX) and many other laws and regulations, collectively called Governance-Risk-Compliance (GRC). Yet in all of the discussion of SOX and GRC over recent years little or no attention has been directed to how contracts are a necessary link in any financial control or other compliance program. Intelligent auditing of contracts will yield an assessment of compliance gaps exist and what is needed to fill them.