Today, in the last post of our 4-part blog series on running an effective contract portfolio audit, we’ll cover the fourth and final step in the process. For those of you just tuning in, you can learn about step 1 here, step 2 here, and step 3 here. If you’ve been following along with us, congratulations! You have successfully found and organized all of your contracts and standardized your contract language. You've completed a comprehensive and corrective contract audit. So, now what?
Based on what you've learned in steps 1-3, it’s time to standardize your process so you can repeat regularly. Make sure to document all individuals involved and the software employed to ensure you can perform fast and clean audits going forward.
Step #4: Standardize Your Contract Auditing Process
Quarterly or annual contract audits will keep any agreements from slipping through the cracks and also allow you to benchmark how well any process improvements are going. If 20% of your contracts were saved outside your repository before your first audit, but only 5% of your new agreements are "misplaced" three months later, that's clear progress. The same goes for contracts with out-of-date or non-standard language.
If you identify unmanageable areas in your audit process, you can target those for improvements the next time around. The moral of the story is that these audits can be optimized, but they are not optional. If you can't find every contract in your portfolio or define which agreements are non-standard, you don't have a true understanding of your organization's risks, obligations, and opportunities. The only way to stay on top of this data is with regular contract audits.
In order to run an effective legal team, contract audits should be a part of your standard operating procedures. Thankfully, modern technology makes contract audits far more manageable and repeatable. If you want to simplify and expedite your contract auditing process, you need contract management software that can parse and analyze every agreement in your legal portfolio. If you're ready to maximize the effectiveness of your contract audit process -- and minimize the time it takes to complete each audit cycle -- contact LinkSquares today.