Contracts are critical legal instruments for companies of all sizes in almost every industry. Although obtaining, negotiating and organizing contracts is a fairly lengthy process, the awarding of contracts will not end once the agreement has been written. In fact, the actual work begins once all parties have signed the final documents. In order to ensure compliance with the contractual conditions, it is essential to carry out periodic audits. This can be done at the micro level (i.e. by contract) or at the macro level (i.e. a review of the entire portfolio). A company must determine what it wants to achieve by reviewing its contracts. This can be achieved by setting clear objectives from the outset.
For example, many companies are concerned about cost overruns and leaks, so they might want to investigate the effectiveness and potential layoffs of contracts. In other cases, companies may fear that their contracting parties will not want to stop the end of the agreement and thus assess whether deadlines and commitments are being met in a timely manner. There can be many reasons why companies decide to launch an audit, and as long as the ultimate goal and end result are clear, it will help guide the process. The idea of looking at every facet of a business is undoubtedly stressful, and conducting a contract review can be downright daunting, given the legal impact of non-compliance.