What are Contract Compliance Services?
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Jen: This is the PKF Texas Entrepreneur’s Playbook. I'm Jen Lemanski, and I'm here today with Carlos Gomez, an Audit Manager and one of the faces of the PKF Texas Contract Compliance services team. Carlos, welcome the Playbook.
Carlos: Thank you. Thank you for having me.
Jen: So, what are contract compliance services?
Carlos: Contract compliance services is a mixture of different types of audit that we can do for a third-party in order to make sure you're getting paid the right amount of money that you're due, whether it be a license agreement or franchise or a vendor that you want to review.
Jen: So, who would need these types of services?
Carlos: Anybody with an agreement that has some type of condition, whether it's shared expenses or revenue where the base is based on somebody's production, rather it be a manufacturing, a completion of a contract for construction gig, something where both parties share in expenses and recovery.
Jen: So, when would you call somebody, like our team, in?
Carlos: It’s usually better to do a review between three and five years of an ending contract. Now, if you're in a very short contract where it's a one-year thing, usually in the beginning is better, because then you give us time to go in and help with the negotiations agreement, or if you're going to renew after that one year, if there's potential for additional years, we can always help.
Jen: And are there any additional benefits to bringing in somebody like us to review contracts?
Carlos: There's a lot. There's missed revenue all the time, and it's not that people are intentionally doing it; most the time it's just not understanding the contracts, not understanding the accounting purposes. They need to go behind it in order to make sure that you report correctly. And some of these reports are done as self-reporting. And so, they don't put systems in place in order to meet the contract needs sometimes it's just meant to meet GAAP, and that's where we can help.
Jen: Perfect. And do you ever work with attorneys, because this also sounds like something an attorney would do.
Carlos: We do. We try to help on the front end, whether it be drafting agreement language that's most beneficial for you, either as a third party in the agreement or as a licensor that holds all the intellectual property rights. We can help both sides, and there are times where it does go to litigation, but we do everything we can to treat everybody with the most amount of respect and make it a real joint venture type work.
Jen: Perfect. Well, we'll get you back to talk a little bit more about this in depth. Does that sound good?
Carlos: Yes ma'am. Thank you.
Jen: Perfect. For more information about this topic, visit www.PKFTexas.com/ContractCompliance. This has been another thought leader production brought to you by PKF Texas the Entrepreneur’s Playbook. Tune in next week for another chapter.