Why contract compliance is so vital for businesses of every stage.
Airtight contracts are the cornerstone to successful business operations. Companies in every stage are vulnerable to legal issues and expensive lawsuits when contracts are not properly managed. In fact, every agreement your business makes, whether it is with a customer or an employee, must properly executed, interpreted and maintained. This is where contract compliance comes into the picture.
Understanding Contract Compliance
- What is Contract Compliance? Contract compliance is the practice that ensures your contracts are in line with your business needs and expectations, as well as the needs and expectations of the parties with whom you are in contract to do business. This practice not only ensures terms and conditions are being met, but according to the Supply and Demand Chain Executive, “a [contract compliance] audit can uncover significant overpayments or under-reported revenue, unrecorded liabilities, missed savings and other exposures that could be detrimental to the organization if left unaddressed.”
- Correlating Contractual Language with Business Coverage. Contractual language and the details of your business coverage can both be full of legal and business jargon, which is oftentimes confusing to those untrained in understanding these types of documents. A contract compliance specialist can analyze the language of each contract to ensure it aligns with the insurance and risk management strategies of the business. For instance, terms that are agreed to within a contract that are not carefully outlined and detailed can expose your business, vendors, subcontractors or distributors to unnecessary risk. Contract compliance ensures that all parties are protected and aware of the terms they have agreed upon.
- Mitigate Risk with Contract Compliance. Beyond matching up contractual language with business coverage, it is vital to determine how to fix and further mitigate business risks due to the disjointed verbiage. Start by reviewing all existing business contracts, and revising them to meet your new company standard. Rather than hiring someone in house to manage this process, engaging expert compliance partners who understand how to negotiate, support and manage the contractual language can save you money and time—and effectively reduce your business exposure.
Wolf Point Advisors has a team of experts who specialize in analyzing contractual language, identifying gaps in your business coverage, and mitigating the risk to your organization. By collaborating with our team, your business and contracted partners are ensured to be protected in the way the contract was intended. Contact us to get started.