Our consultants and auditors conduct vendor contract compliance audit services to manage risk, improve processes and collect from overcharges.
We work with large, sophisticated and complex organizations to help them manage risk from third party providers of products and services. There are many moving parts in large organizations. Business unit executives, purchasing, sourcing and legal teams spend a lot of time and company resources in developing good contracts, agreements and statements of work. However, keeping track of thousands of vendors and ensuring they comply with contractual terms is difficult. When these activities are ignored, invoice error rates and fraud escalate. A recent Kroll report on fraud indicates 66% of companies in the US were hit by fraud last year, and the average loss of revenue was 1.2% .
In our experience with auditing vendor contracts and agreements, in many categories of purchases it is common to find error rates exceeding 10% of the contractual value. The direct financial impact of these issues are large and, perhaps equally important, they point to significant issues in risk management and internal control processes.
We work with sourcing, purchasing teams and business executives to understand broad supplier contractual issues and provide specific detailed examples on contract non-compliance. We can help companies recover from billing errors and even fraudulent billing by vendors.