Every year, large retailers and commercial enterprises across industries such as manufacturing, energy, healthcare, and consumer goods execute thousands of indirect spend contracts with complex terms and conditions that often go unchecked—and represent millions of dollars in overpayments. Confirming compliance with contract terms is critical to ensure what was negotiated was received, but identifying errors is just the first step on the path to complete payment accuracy. Supplier cooperation is critical, but not always easy to obtain. A skilled audit partner can best navigate the negotiation and settlement process to drive a fair and favorable outcome for all involved.
Cotiviti’s Retail and Enterprise Contract Compliance group completes more than 100 audits per year for our clients, deploying dedicated experts to review the terms, conditions, and intent of suppliers’ contracts and compare them with goods and services actually delivered. We identify anomalies to contract intent thorough analysis of key cost, pricing, and profit elements within each contract. The risk profile we have developed can help identify potential audit opportunities.
Recover as much as 1 to 5 percent of spend
Increase transparency into vendor billing practices
Strengthen contract language and ensure that vendors honor terms
Identify control weaknesses
Improve contract management processes
Gain assistance with contract renewal negotiations
Explore future cost savings opportunities and prevent leakage
Strengthen client/vendor relationships with clearer expectations
Our audits dive deeply into contract foundations, identifying compliance shortfalls, surfacing corresponding payment errors, highlighting contract issues, and identifying risk. We accomplish this by analyzing the source of key cost, pricing, and profit elements and supporting payment documentation. Equally important, we protect and maintain critical business relationships and make insightful and accurate process improvement recommendations that mitigate future financial losses.
Our contract-related work spans virtually all categories of our clients’ spend, delivering current and future savings that can total millions of dollars. From labor to logistics to IT to recycling, we assist our clients across their diverse contract universe to catch noncompliance in their highest-risk vendor relationships. We routinely review contract structures, such as cost-plus, unit cost/price, time/expense, and lump-sum agreements. And we scrutinize complex terms and conditions, such as gain sharing, labor-rate build-up, indexed-based pricing, overhead mark-ups, rebates, and more.
The breadth of experience within our Contract Compliance audit practice spans a wide array of contract types, spend categories, contractual elements, and service categories. Our audits are comprehensive and can address both direct and indirect spend. Our experience and expertise extend into many areas. Our clients appreciate the sensitive approach we take in providing meaningful savings opportunities and insight to strengthen future agreements.
We not only review our clients’ data but also travel to the supplier’s site, when appropriate, to review their records, such as invoice and cost source data. Compliance can be accurately calculated only by testing this source data.
Facilities and equipment
Temporary labor and staff augmentation
Business process outsourcing
Warehousing, distribution and logistics
Marketing, advertising and communications