Checklist for Auditing your Contract Management Process!

Are you sure that your contract management process is error-free? This is the main question to be asked if you are running a Law Firm. If you are facing problems related to this process, this article can be helpful to you. Let’s get in the depth.

Well, an effective contract management process is a must for prosperous growth of a company as it helps in establishing better relationships. Although this may appear to be a simple process but executing it, is a definitively challenging one.  

There are many benefits of timely contract management audits for a company:

• Better document management

• Alerts for Renewal Date

• Risk Reduction

• Financial Optimization

• Security

So here are some questions that businesses should keep in mind while auditing contracts in your organization:

1. Contract Preparation: Is the contract being prepared in accordance with the set objectives?
   This is a primary question as contracts have to be prepared according to the set objectives of the company. So taking care of this aspect is very necessary.
   
   
2. Contract Drafting: Are attorneys getting consulted during the drafting? What clauses are being used in the contract?
   Taking care of this part is very vital as this can speed-up the contract management process steps and brings more reliable results.
   
   
3. Arranging the negotiations: Is the contract being formulated according to the wishes of all the parties?
   If this process does not take place smoothly, then there are chances of conflict between the parties involved. This is the reason why the emphasis is given on this step.
   
   
4. Approving the contract: Who are the authorities that can approve the contract? Do they agree with all the aspects?
   Here, at this stage, approval is taken from the appointed authorities. They clear the set benchmarks for the contract.
   
   
5. Reviewing & Managing the Contract: What are the obsolete contracts that are still being maintained?
   Understanding the need for finding those contracts which are no longer useful for an organization is very important. With this, the cost of maintenance gets reduced, and companies get an edge over competitors.
   
   
6. Contract Abstraction: Are we able to properly carry out contract abstraction? Do we have the required resources?
   At this stage, it becomes compulsory to figure out which information can be extracted according to the requirements from a contract. So, here, this question is much important at the final stages.
   
   
7. Optimization: What new systems can be implemented to avoid issues in the future?
   In this final stage of contract management lifecycle, new ways of building contracts from scratch or for optimizing contracts are accomplished. This is necessary to increase the efficiency of the contract management process.

So these are the prominent questions that should be asked while auditing the contract management process. However, from the above-stated contract management process, it can be concluded that getting desired results from this process is not that easy. So a simpler way out has been found with the help of which companies can get a better output, it is opting for contract management services. By choosing this way, the overall efficiency of the company can get a boost.

Also Read: Legal Expert’s Opinion on Contract Breach

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