Businesses of all sizes, operating in all industries, are subject to issues of compliance. In many respects, to ensure success, it should be at the core of everything we do in our working day. Compliance is a very broad area that ultimately involves everybody working within the company structure to varying degrees. Every employee, senior manager, and owner has a responsibility to comply with regulations, and with the rules and values of the company. But, of all those within the organization working towards ensuring compliance, the issue particularly concerns those dealing with contracts and agreements.
At the point where compliance within your business intersects with your contracts system, we see two areas that need consistent and skilled management:
- Compliance with contract terms
- Compliance with regulatory requirements
Both of these areas can potentially have a significant impact on your current financial and legal situation, as well as on the future progress of your business.
Compliance with contract terms
A contract – whether it’s with an employee, vendor, supplier, or third party – is a document that sets out agreed terms, and makes clear the obligations, duties and responsibilities of all involved. The detail of such documentation is vital to the success of a business or project but only works when everyone complies with its content.
This is where the monitoring of compliance within a contracts system comes into sharp relief. If any part of the compliance process fails, and a single part of that agreement chain is breached, the entire enterprise can be jeopardized. Legal and financial risks are increased, and additional pressure is felt throughout the company structure. Consistent oversight of standards, processes, and business rules is vital.
Compliance with regulatory requirements
Today, every industry is subject to regulatory requirements and this intersects with the contracts system of a business in a notable way. Every party that features in your contracts system is protected by regulations, including employees, vendors, suppliers, and third parties. You are required to comply with regulations governing your conduct within the parameters of your relationships with those parties.
Each interested party has legal rights in terms of their expectations, and you are obligated to ensure that these legal rights are met in every circumstance. Failure to do so can prompt legal action, and investigations by regulating authorities. This, in turn, can result in financial loss and reputational damage. Moreover, your business is required to keep track of contractual compliance, in order to adhere to regulations.
How does Contract Management Software help?
Managing compliance with regard to your contracts system is a complex necessity, requiring the monitoring of conduct and progress with regard to specific clauses and terms, as well as the overall relationship with the interested parties in question. Managing this rather nebulous data set is an intimidating task for small operations, but it is overwhelming for larger companies – some of which may still utilize facilities like unconnected spreadsheets and databases to keep track of compliance.
The right Contract Management Software is specifically designed with all your compliance needs in mind. All data is securely stored in a Central Repository, with access controls built in. This ensures your compliance with data protection regulations. Intelligent Questionnaires help you identify risk within new business relationships, enabling you to ensure compliance with your legal obligations in respect of those relationships, clients, and employees.
Crucially, risk mitigation features within Contract Management Software enable you to thoroughly vet potential vendors, suppliers, employees, and third parties. This provides you with compliance protection by making your due diligence easier. You can more easily identify elements of corruption, cybercrime, money laundering, fraud, sanctioned businesses and individuals, and the financing of terrorism. By completing these checks, efforts in regulatory and contractual compliance are increased.
These Contract Management Software features are especially important for businesses and corporations whose enterprise spans borders and territories. For such international operations, compliance is a particularly complex issue, with laws and regulations differing from country to country. The need to achieve compliance across these boundaries means that an easy-to-use software package is essential. The right package will allow the business to store the detail of relevant laws and regulations while making them accessible to personnel.
Contract Management Software streamlines your contracts system with standardized clauses and language, instantly simplifying the process of compliance monitoring. The centralized system also provides a notification and tracking feature, which can make missed deadlines and milestones a thing of the past. It is far easier and much more cost-effective to ensure your business operations are compliant with regulations and contract clauses when all of your contracts are in the same place, follow the same format, and are covered in system reporting.
The generation of reports is perhaps the biggest contribution that Contract Management Software makes to your compliance process. Accurate reporting not only provides you with in-depth business insights, it also provides you with the opportunity to take a pro-active approach to compliance – identifying risk and compliance issues in advance and taking the necessary decisions and actions. In addition, it provides you with auditable documentation, which is essential for achieving regulatory compliance, and for providing evidence of the same in multiple territories.
When contracts are streamlined, and obligations and timelines are optimized, clearer management oversight is achievable. This allows for accelerated decision making once incidents of non-compliance are captured and reported, and event triggers are aided by a higher level of automation. With all of these features available to boost compliance in your business, the final piece of the puzzle is customization.
It is vital for Contract Management Software to allow its users to customize their experience. While compliance law and regulation is something that applies in every industry and territory, the software user experience must be tailored to the day-to-day nature of the operation, in order for its installation to be fully integrated, in a timely, efficient, and compliant way.
Contact Symfact today to discuss your business needs, and arrange your demonstration of our compliance-enhancing Contract Management Software.