Having an efficient and effective contract management process is crucial to the success of any modern business. So much so that even the slightest hints of inefficiency can have disastrous effects. This is especially true if your goal is to grow and scale your business. Considering how important it is to ensure that your contract management process is up to par, auditing shoots up in the list of things that you should prioritize.
Now, this is easier said than done as auditing your contract management process can get rather tricky. Despite the difficulties involved, it’s not impossible for businesses to find ways to measure performance accurately by auditing their contract lifecycle management (CLM) efforts. To help simplify things for you, we thought it would be useful to put together an article that points you in the right direction. If this is something that you want to learn more about, read on for a guide to auditing your contract management process.
Review Your Contract Accessibility
The first thing that you’ll want to concern yourself with is contract accessibility. This shouldn’t be too much of a problem especially if you’re using a centralized CLM solution for all your contracts. If you still use spreadsheets and email to manage your contracts, then it may be time to reassess how you do things as this archaic way to manage contracts can make it difficult to comply with different regulations. And while you may be hesitant to make use of centralized CLM solutions due to the costs attached to them, the harm that non-compliance to regulations can bring to your business is far more damaging than the costs that you need to pay for centralized CLM solutions.
Evaluate Clauses and Templates for Risks
While clauses and templates make contract drafting easier, we suggest that you evaluate your templates regularly. Failure to do so could open you up to both financial and compliance risks. When evaluating clauses and templates, you’ll want to ask yourself the following questions:
- Are you capturing all the required information?
- Are your current clauses up-to-date with the latest regulatory requirements?
- Are your templates and clauses standardized?
If the answer is no to any of the questions listed above, then you may need to rework the templates and clauses that you are currently using.
Use Previous Compliance Audits to Review Your Current CLM Process
Remember that you don’t have to start from scratch when reviewing your current CLM process. Data derived from past audits can help inform any changes that need to be made to your current process. If you’ve passed a compliance audit in the past, the findings from that process can yield valuable information that you can use to improve how you approach the contract management process as a whole. We suggest creating a list of past findings and then auditing your current system against that list. This should help narrow down the problem areas that you need to improve on.
Hopefully, this article proves to be useful when it comes to helping your business audit your contract management process. While this may seem tedious, it’s a necessary part of any successful business. We suggest that you be as thorough as you can be so you can work out any kinks in your contract management process.
The best way to prepare for a contract’s self-audit is to have all your contacts in a searchable repository. Be sure to get a contract lifecycle management (CLM) tool that has metadata tagging. That way you can group contracts by any parameter you want – for example, time, cost, and deliverable.
If you’re looking for the best contract management software, then you’ve come to the right place. Anapact is the best CLM tool to support a contract self-audit. It was built for small businesses like yours – and it does so much more. Get a demo today.