It’s difficult to claim that you are compliant with internal or external rules and regulations if you don’t have a good base to start with.  Take the concept of the accurate value of your customer contracts for instance or exposure due to vendor contracts, both part of any Sarbanes Oxley regulations (SOX).  It’s hard to imagine having complete confidence in those values or exposures, defined as no more than 5% deviation by SOX, if you don’t have confidence in the collection of supporting documentation.

The focus on customer contracts should take precedence and probably does already in terms of recording the contract terms in your billing system.  But the effort for the most part is still a manual data entry process unless it’s a B2C relationship and all executed digitally online.  Having those contracts to support the revenue is still very likely a messy, disorganized affair with some digital and some paper, some in the cloud and some on the network or attached to the ERP.  An impossible task to corral it all right?

So what’s the issue?  It seems impossible sometimes to think about the effort to gather, organize, validate the supporting documents and to then capture data from those same documents.  This includes vendor and customer contracts but could also include fixed asset purchase documentation like invoices showing In Service dates.  It is no small task but the value of the end result is enormous.  And with the right approach, the task is not impossible at all. 

Here is a very typical situation for vendor contracts. The contracts are all kept in a digital folder or physical folders or a bit of both, sorted by vendor name.  But there is no comprehensive list of the contracts and even if there is a list, the list is not actively maintained.  Nobody knows which contracts are active, much less which contracts pose higher risk to the organization.  Worse yet, that means you don’t have an accurate picture of the value of future contract obligations. 

The use of digital signature solutions is helping to speed the execution of the contracts, which is a good thing, but those digital copies are not managed any more than other contracts and simply represent another silo of documentation.  Any auditor should be able to see the entire collection of contract documentation for a customer account AND the entire history of receipt, review and archival.  That sounds like workflow and it is and it’s a very achievable process.

Our recommendations to achieve compliance are fairly simple.  Use a funnel approach.  Start by gathering all contract documentation and standardizing it all as digital documents.  Then start with correctly identifying the documents by vendor/customer and at least date and type.  Next, group the documents by contract (contract plus amendments, etc).  This will then allow you to record the entire set of terms of each contract, including Active vs In-active.  Once you have each active contract identified you can compare the terms of the contracts to what is being billed or collected.

Each part of the funnel process does require different solutions including possibly scanning, data entry, digital organizing, workflow and ultimately data export or archiving.  But like all such “impossible: projects, the information and insight gathered during the process will provide value well in excess of the cost.  You will hopefully discover that you can increase revenue or decrease cost.

Millennia Group provides workflow and document management solutions including services for digitizing, organizing and data extraction.  www.mgdocs.com, info@mgdocs.com, (630) 279-0577 x122.