Every organization strives to achieve compliance for their contracts. Establishing a smooth audit system for internal processes is one of the best practices to ensure your contracts are always compliant.
Conducting audits periodically will ensure adherence to various contractual terms and conditions and reinforce timely fulfillment of obligations. This, in turn, will facilitate effective enforcement of penalty clauses (for missed milestones of payment, etc.), identification of opportunities for cross-selling and up-selling of products and services, and an overall prevention of financial losses.
But there’s a major roadblock to efficient auditing—disparate data. Trying to consolidate and audit contract data spread across different geographies requires a huge effort
Contract Lifecycle Management (CLM) capabilities such as a centralized contract repository support the establishment of a smooth internal audit system, thereby simplifying contract compliance reporting. The repository stores all your contracts and supporting documents such as regulatory approvals, insurance certificates, and more. It is easily accessible to designated individuals and offers various search capabilities such as the free text and metadata-based search, while also maintaining an audit trail of who did what and when.
To make things easier, organizations must determine several key parameters of the audit process beforehand: time, duration, frequency, objectives, contract types under purview, and so on. This will ensure audit preparedness among the employees, streamline the entire process, and hence produce better results.
Increasing visibility and developing the necessary infrastructure and organizational commitment towards contract compliance is one of the key steps in embracing best practices. Having a system in place which measures internal processes and puts in plain sight what needs to be done, helps in achieving it.
To see more best practices for achieving contract compliance, check out this blog.
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