factsheet
Reduce risk and increase financial responsibility in the procurement of outsourced services
Beeline Services Procurement makes statement of work (SOW) oversight consistent and automatic
Benefits
- Reduce administrative burden for the finance department
- Increase fiscal responsibility
- Track, manage, and document workers’ classification
- Match invoices with deliverables and milestone approvals
- Identify savings achieved and savings opportunities
As outsourced services grow, so do the risks
According to Ardent Partners, non-employee workers comprise nearly half of an average company’s workforce. Much of this extended workforce consists of contractors, consultants, and outsourced service providers engaged via SOW based contracts.
That is why many organizations use the Services Procurement capabilities in their vendor management system (VMS) to manage these contractors. This is frequently the responsibility of the company’s contingent workforce management (CWM) program office, but other departments also have much to gain from all SOWs being housed in one system.
Remove volatility associated with unmonitored project spend
Leveraging Beeline Services Procurement for all your company projects allows you to have better accrual reporting and gives you visibility into project outcomes, not just hours worked. Instead of paying for hours worked, including overtime, without knowing the impact of that work, you will only pay for what was agreed upon in your SOW. And you will easily see what was paid, who approved it, which budget it came from, and more.
Predictability and cost minimize financial risk
Financial risks include cost and budget overruns associated with time-and-materials-based contracts. They can include mismanagement of overtime or large numbers of workers accruing time against a single SOW.
Finance needs to understand what is being spent, with whom, and why for every business expenditure within their organization. With little or no visibility into projects’ progress or performance, they cannot accurately:
- Determine if project budgets are being met
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Verify if additional budget needs are valid
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Confirm they are paying only for outcomes-based deliverables (milestones) and getting the best impact for the agreed-upon price
- Reconcile all data to be audit-ready data at a moment’s notice
Get better visibility to see where money is spent, and which SOWs haven’t yet submitted milestones
Detect misclassification issues
Managers often use SOWs to circumvent staff augmentation controls. However, hiring contingent staff via SOWs can set your business up for financial and misclassification risks.
Misclassification risks can stem from failure to comply with a whole assortment of tests, laws, and regulations. Multifactor analysis tests include, but are not limited to ABC, IRS 20-Factor, Economic Realities, and Common Law tests. Laws and regulations include IR35 (UK), Employee or Independent Contractor Classification Under the Fair Labor Standards Act (US), and Working Time Directives (EU, UK, and others). These rules can apply differently from one locality, nation, or region to another.
Beeline Services Procurement allows you to detect misclassification issues by automating processes so you can ensure necessary corrections are made consistently, efficiently, and cost-effectively.
Mitigate risk through visibility
The first step toward managing and minimizing financial and compliance risks is to gain complete visibility of all external workers, including independent contractors (ICs), consultants, and other service contractors engaged via an SOW. The easiest way to do this is to ensure all SOWs for outsourced services are managed within your VMS Services Procurement module.
This allows Procurement to:
- Track deliverables tied to the work they’re paying for
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Determine if there are multi-year projects in status quo regardless of performance/deliverables
- Measure and show achieved cost savings to their organization
- Identify areas of opportunity for achieved savings, such as preferred suppliers, deliverable-based work vs. hourly rates, etc.
Knowing where all your SOWs are also ensures that contractor access to company facilities, networks, and data is controlled based on the needs of the contract and terminated on an individual basis when access is no longer required.
The financial impact of a multi-year project can be substantial if there are no trackable deliverables
Save time and money
Many companies that have implemented Services Procurement only manage a portion of their projects and SOWs. Without managing all your SOWs in one system, you open your company up to financial and workforce classification risks. Save time and money by taking advantage of your Services Procurement solution today.