Oftentimes, large companies in highly-regulated industries such as healthcare organizations and public (government) agencies have strict guidelines that they are obligated to follow in order to monitor their contracts for compliance. Some of these include:
- review and approvals prior to each party signing the contract
- periodic reviews after signing the contract (such as a 30, 60 ,90 day)
- contract review for contracts over a specified value (budget review)
- review for contracts in specified departments
- review for contracts in specified services
- reviews prior to contract end
- reviews after contract expiration and/or termination (such as contract close out)
How can we make it easier for contract professionals, such as corporate attorneys, paralegals, contract administrators, controllers, and managers (and the like) to assert that they have the appropriate contract review processes in place that comply with state, federal, corporate, and other regulations?
Best practices tell us we can implement a preventive control or a detective control. More commonly, preventive controls are preferred because they are proactive and help avoid an unwanted situation prior to the event happening (hence, prior to signing a contract). However, detective controls also play a critical role by providing evidence that the preventive controls are functioning correctly (or large data needs to be analyzed) and are important for looking back at what has already happened.
How can you easily comply with your organization’s standards or federal/state and other regulatory controls using contract management software? It’s easy! CobbleStone has been helping organizations, like yours, with contract compliance for nearly 20 years by providing Contract Insight™, a software tool specializing in helping organizations manage contracts more effectively, obtain contract approvals, electronic signatures, and compliance tracking.
Let’s get started with a simplified scenario.
First, analyze the controls your organization is required to comply with. Seek professional help from a corporate controller, contract profession, regulatory documentation, or lawyer. Ensure your organization adopts these controls.
Second, implement Contract Insight™ Enterprise Contract Management Software.
Next, configure preventative controls and detective controls in Contract Insight™.
Let’s imagine your controls include that all new contracts are first reviewed by a contract administrator, or a paralegal (ultimately a lawyer is best), prior to signing the contract. In addition, if the contract is over $50,000 it must be reviewed by Mary in Finance. Moreover, if the contract is for IT Software, the contract must be reviewed by the IT Director.
It is easy to configure both preventative controls and detective controls with Contract Insight™.
Managing Contract Compliance using Preventative Controls with Contract Insight™
For a preventive control, Contract Insight™ offers workflows tasks that monitor the field values of each contract record entered. So, for example, if the employee (user) enters in a new contract with a value over $50,000 (for this example) Contract Insight™ would route an approval Task (and email alert) to Mary in Finance to review and approve the contract. This would satisfy that we are preventing a signing of a contract that is over $50,000 because it must be reviewed and approved by Mary in Finance. In addition, a workflow task could be configured to automatically alert a contract administrator (perhaps a lawyer or paralegal) to review the contract for all new contract records added.
Managing Contract Compliance using Detective Controls with Contract Insight™
Let’s also imagine that the same organization must perform monthly audits (as a detective control) to locate (detect) any contract record that is new in the last X number of days (say 30 days) or is over $50,000. That is also easy to do with Contract Insight™.
First, we set up a monitoring report using Contract Insight’s User Reporting tool where we report on the Contract Table for all records that have been entered into the system within the last X days and all contracts that have a Contract Amount greater than $50,000.
Next, we assign the report(s) to the contract administrator and Mary (as needed), plus have the report sent to them automatically via e-mail the 1st day of every month (or other customized frequency).
Mission accomplished. Although your organization’s rules may be different, it is easy to confirm compliance monitoring when you select the correct contract management software, like Contract Insight™. In addition, your organization will reduce contract risk, comply better with organizational policies and procedures, and with federal/state and other regulatory controls using Contract Insight™ Contract Management Software. Now that was easy.
About CobbleStone Software and Contract Insight™
CobbleStone has helped thousands of contract professions better manage their contracts and contract compliance for nearly 20 years. Learn more about Contract Insight™ Contract Management Software by visiting us at http://www.CobbleStoneSystems.com and sign up for a free demo.