Properly managing your third party relationship contracts can help you avoid the risk of financial and credibility damages
Today's global market economy demands greater dependence on third party relationships. And given the critical nature of these associations, establishing and managing the contracts associated with them will enable you to improve their commercial outcomes.
Commercial assurance involves identifying, validating and managing the risks associated with third party contracts. It gives you the opportunity to drive savings, process enhancements and knowledge transfer, while also ensuring compliance.
Inadequate third party contract management practices can hurt your bottom line and increase the risks of financial losses, damage to your company's reputation and possible regulatory issues.
Do you fully understand the inherent risks within third party contracts? Having a proper understanding of the type of contractual agreements to use in different scenarios will help you bring to light all the potential risks within your contracts.
What contingency plans do you have in place if a third party relationship doesn’t work out? Some contracts can lead to value leakage, but with the right methodologies and audits, you can perform contract reviews to uncover non-compliance issues that will help you recover cash.
How do you determine whether your company can work effectively with your proposed partners? Being able to identify contract negotiation fee risks, while getting help initiating and executing contracts, will reduce the risk of having your company's reputation damaged.
Do you have the appropriate programs in place to satisfy both regulators and stakeholders? Designing a program specifically to improve your overall contract management processes, while enhancing your internal assurance functions, gives you the chance to eliminate contract inconsistencies.
Contracts are the backbone of what can often be very complex relationships between you and your vendors. At PwC we maintain that by taking a structured approach to managing these contracts, you'll experience significant financial and operational benefits.
We take a full-service approach. So depending on your specific scenario, we can provide one-time investigative services, a recurring monitoring audit function or complete assistance in transforming your internal skills. And we can give you the tools to help build your capabilities to press forward independently with commercial assurance programs.
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