Some businesses make the mistake of concluding their contract management process the moment all contracting parties sign the dotted line. Once the deal is officially sealed, the contract gets stored, only to collect dust and never be seen again. But the truth is that some of the most critical steps happen after contract signing.
One that’s often overlooked is contract auditing. It’s an important aspect that involves a thorough review and analysis of the terms and conditions of the contract. This helps ensure that everyone involved is fulfilling their obligations and adhering to the agreement’s terms.
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What Is Contract Auditing?
To put it simply, contract auditing is like an internal review of an agreement to ensure that everything is going according to what was agreed upon. It plays a crucial role in identifying potential issues before they get out of hand and cause disputes.
Contract auditing mainly involves reviewing the terms and conditions of the agreement and evaluating the performance of all parties involved. This provides a transparent assessment of the performance of the contract.
The Best Practices for Effective Contract Auditing
Contract auditing is no small feat. It requires a systematic and structured approach that’s equally time-consuming and complex. It’s no wonder a lot of people shy away from performing such an important step in contract management.
If you are one of those who find contract auditing tedious and daunting, here are some helpful tips to simplify the process.
Having a clear roadmap helps make contract auditing less daunting. When you divide the process into small manageable steps or milestones, you are more likely to feel less overwhelmed and lost. Planning helps you stay on top of your tasks while making sure you finish everything on time.
Focus on the critical areas
Part and parcel of making your contract auditing plan is identifying the critical areas of the process that require the most attention. These areas typically include pricing, delivery schedules, and performance metrics. This will help you prioritize your efforts and ensure that you are focusing on the most important issues.
Nowadays there’s an abundance of online tools and software that can help you make contract management more manageable. These tools can help you automate many of the manual tasks involved in the audit process, such as data collection and analysis. If you regularly deal with tens and hundreds of contracts regularly, these tools can be such a great investment.
For a complex process like contract auditing, it’s ideal if you appoint a member of your team to be the key resource person. This individual must have a solid background in contract management, among other things. This can help ensure that the audit is conducted effectively and efficiently by experts in the field.
To build an effective contract management system, you need to constantly work on improving your process. Conduct a review and evaluation to see which areas need improving. So the next time you audit contracts, everything will go more smoothly.
Top 3 Tools for Contract Auditing
As mentioned earlier, having the right set of tools can make contract auditing a breeze. If you are keen on investing in some of them, here are our top 3 recommendations:
Contract management software
Contract management software is one of the best investments you could ever make if you wish to simplify your auditing process. Aside from providing a centralized location for contract data, this tool also automates workflows and generates and analyzes important data.
Data analytics software
Contract auditing is a highly data-driven process, so it just makes a lot of sense to integrate a tool that can identify trends and anomalies in contract data, such as pricing discrepancies or delivery delays.
Electronic signature software
Digital contracts are becoming increasingly popular as more and more businesses are slowly switching to paperless solutions. This being said, electronic signature software could be an invaluable tool not just for online contract signing but also for contract auditing. Many eSignature tools also offer a range of features that can automate many tasks.
Fill: The Ultimate Tool for Hassle-Free Contract Auditing
If you’ve ever been tasked to audit contracts, you would know that this process is not a walk in the park. Without the right tools and resources, the whole process can take ages to finish. This is where Fill comes in.
Fill is a powerful and intuitive platform that not only offers an eSignature solution but also features that can help simplify your contract auditing process. With Fill, you can store all your contracts in one secure location, making it easier for you to access and review all contract-related information. You can also automate a myriad of tasks associated with contract auditing, including analytics and data reporting.