What's on your Mind?
One or more of the following issues may be relevant:
- Your business has outsourced services / business processes to counterparties ("vendors” or "business partners”).
- The financial arrangements are complex and vendor charges are significant but lack transparency.
- Your organisation procures large volumes of goods from individual suppliers under supply agreements with complex financial terms (such as most favoured nation and rebate clauses).
- Your business licenses its IP to counterparties ("licensees”) in return for license fees / royalties. The client relies on the honesty and capability of licensees to report royalties and fees due accurately and completely.
- Your organisation is exposed to the risk of significant unrecognised financial liabilities due to use of unlicensed software, arising from difficulties in managing intangible assets.
- You are paying significantly more for software licenses and maintenance than is necessary because of difficulties in measuring actual requirements.
Bringing you Peace of Mind
- Review the whole population of your organisation's contractual relationships and identify potential financial risks.
Prioritise contracts for further action to mitigate financial risks.
- Provide visibility of the performance of your organisation's suppliers, business partners and licensees in respect of their compliance with contractual financial obligations by exercising audit rights.
- Assist your organisation in more effectively managing software licenses to reduce the risk of non-compliance with the terms of license agreements and avoid wasted expense.
What's in it for you?
- Cash recoveries typically between four and 10 times KPMG fees.
- Help ensure future charging under supply agreements is at the correct level.
- Help ensure future royalty income is reported accurately and completely.
- Provides a robust Governance Framework where counterparty relationships are a significant part of your organisation's business model.
Why KPMG?
- KPMG is a global market leader in checking compliance with the financial terms of complex contracts.
- At any one time we have more than 1,200 reviews of counterparties in progress around the world.
- In the past six years KPMG helped clients recover over Euro 750m worldwide, relating to overcharging for supplies of goods and services / under-declaration of royalties and license fees.
- Globally KPMG has over 300 professionals specialising in this area.
- Our teams are highly scaleable and we are able to deploy local specialist staff in over 40 countries worldwide.
Case Study
Major Oil and Gas Company
- Our client has more than 20,000 suppliers with whom it spends over US$70 Billion annually.
- It requires a strong governance framework to manage this level of spend.
- KPMG was engaged to develop and manage a programme of reviews of major suppliers under audit rights within its agreements
KPMG undertakes reviews at approximately 100 major suppliers annually and in the first 18 months of the engagement identified over $30m in recoverable overcharging, representing a multiple of eight times our fees.
- We have provided opportunities to clarify the intent of ambiguities in contractual terms and identified and provided recommendations to remediate control and process deficiencies within the management of counterparty contracts.
- KPMG has performed reviews using local specialist staff in 15 countries on five continents.
