6 Tips to Conduct a Successful Contract Compliance Audit
Procurement teams negotiate hard to secure benefits and favourable terms put into written contracts. However, all that hard work is for naught if those benefits are not realized. The real work begins once all the concerned parties have signed the negotiated agreements. Of the many daily contract management challenges legal teams face, one that often keeps them awake at night is managing contract performance. During this stage, even the most skilled stakeholders can overlook unintended noncompliance.
To ensure that the agreed-upon terms of a contract are being performed in line, it is crucial to conduct periodic audits. This audit can be performed at a micro-level (i.e., single contract review) or a macro level (i.e., entire portfolio review). Regular contract compliance audits to ensure that your company receives the benefits you bargained for, measure contract effectiveness, identify and improve profitability and verify data reported by vendors you are working with. So, let’s look at a few considerations while performing a contract compliance audit.
6 Key Steps in Contract Compliance Audit:
Set the Right Onset
Define Clear Audit Goals
Manage Cost and Risk
Ensure Compliance with New Market Penetration
Prioritize Contracting Party Collaboration
Report Insights and Remedies