The Ultimate Guide to Preparing for Internal Contract Audits

The Ultimate Guide to Preparing for Internal Contract Audits

by admin
March 2, 2020

Contracts are an important pipeline for any successful business. The exchange of services detailed in the contracts requires precise language that is applicable to the expectations of both parties. Managing multiple contracts is a juggling act where even the most experienced professional can drop the ball. Internal contract audits create a system of check-n-balances that prevent — and guard — your company from making serious and costly mistakes. 


Ultimate Contract Audit Checklist for Complete Records

A contract is only as good as the terms included in the document in addition to any accompanying records. Creating the ultimate internal contract audit checklist before you start is the best way to streamline the audit process. 

While contract audits are necessary, they don’t have to consume your time. Assemble an audit team that is not only qualified but efficient for the task at hand. Next, set goals for the audit, such as a timeline for completion. Next, let them help build the audit checklist — each team member may think of something you forgot to include. Finally, don’t micromanage your team. Trust them to complete in the audit using the skills that attracted them to your business. 

The size and details of the internal contract audit checklist may vary from checklists used in the past. A federal contract, for example, may require a more extensive checklist than a contract with a private business. No matter what type of contract your team begins to audit, establishing objectives and sticking with the checklist is the best way to start your project. 

How to Manage a Complete Internal Contract Audit Project with Your Team

Managing a complete contract compliance audit project demands a strong team with clear objectives. Identifying the goals of the internal contract audit project and the best way of approaching them are two key places to start with your team. 

Chances are your team has other tasks to attend to throughout the internal contract audit process. The right contract management software can unite the team even when they aren’t in the same room. Access to the necessary files and alerts specific for the audit can easily target only those team members working on the project. Software like Contraxware not only makes this possible, but it makes it an appreciated time-saver for everyone. 

Providing your team with the tools they need can prevent frustration and extra stress. Contract software management that helps with the internal contract audit process can help team members better understand their role in the project. While the overall project is to ensure compliance, specific team members may need access to restricted files. A one-stop software system like ContraxAware can provide levels of security for some and prevent access for others, ensuring that your company’s data remains secure. 

Common Errors with Contract Records You Can Easily Identify and Save

team analyzing contract errors in their database

Both sides representing a contract can make a mistake. Whether it is mathematical or relates to the contract terms, identifying and correcting the issue is easier with contract management software.  No business, large or small, can afford even the simplest mistake. Contraxware allows you to identify, fix, and save changes within one software system that is accessible to all team members. 

Reduce Process Confusion

Not streamlining your internal contract audit project can result in contract chaos. Contract audits aren’t necessarily fun. But they are important, and the process doesn’t have to generate stress. Centralized information accessible to the project team members can result in a smoother process for all. 

Check for Human Errors

Human error is a very real thing, even in the day of sophisticated technology. A comprehensive contract software management system provides a way to implement checks and balances for your team. When one signs off on a task, another team member can know — without emailing or phoning them to ask. 

Catching errors with contract records is easier when you have a cloud-based contract management software system supporting you. Once you identify the mistakes and save them, you are better able to watch for the same issues in other contracts. 

Whether the mistake is mathematical, involves a wrong government code, or an incorrect invoice number, catching it during the audit can save you a world of trouble later. As important as your business is to you, the same is most likely true for the client with whom you have the contract. Identifying and saving contract errors can save a business relationship. Missing them can cost you a contract, especially with a government contractor. 

Your internal contract audit team can breathe easier knowing that the contract management software they use provides a layer of protection to the process. Audits aren’t necessarily fun, but contract management software like that of ContraxAware can make it easier to identify mistakes and protect the company’s important contracts. 

How to Internally Search for a Contract

Searching for a particular contract is time-consuming without contract management software. By utilizing a system like Contraxware, you can search the database using the interactive dashboard. There’s no emailing, phoning, or tracking down a certain employee to find a contract. Knowing a contract is at your fingertips with a quick software search can provide you peace-of-mind and prevent panic. 

ContraxAware includes data management features such as searching, filtering, grouping, sorting, and sharing of data. These features are invaluable tools for finding the contract you need. The cloud-based contract management software serves as a safe haven for your most valuable documents, keeping them secure and easy to find

Breaking Down Your Contract Process for Internal Auditors

Internal auditors may not understand the original contract process, so you need to give them the resources to make your process clear. For whatever reason, their role wasn’t necessary until the audit project. Bringing them up to speed is easier by granting them access to the right files. All team members may not require access to all files. Establishing permission for who can review which files and what files are to remain restricted is made simpler with Contraxaware.

Contract Process 101 may seem silly to the staff who work with contracts every day. This method may just help those who join the audit process later to better understand what they are looking for and why it is important. Never overestimate someone’s knowledge or skills regarding contracts. Providing review and easy software access to the right files can help everyone better understand the project. 

A special process pertaining to government contracts may help improve the process for larger, federal projects. The scope of the contract and the partners involved plays an important role in how to approach the contract process. So tackling the contract process in stages, using the right software, can make for better collaboration and a more successful workflow process. 

Auditing Government Contracts

Depending upon your business, government contracts can serve as lucrative and steady accounts. If your business has government contracts, you are not alone. More than 4 million clients serve the U.S. Government, collecting more than 5 billion annually.

Any type of audit involving a government contract requires extra attention to the details. Federal contracts are subject to the Federal Acquisition Regulation Act (FAR) and the Federal Acquisition Streamlining Act (FASA). Government contracts can also include state and local level projects. 

Auditing a government contract advances in complexity depending upon the level of government. A contract with a local municipality, for example, will not require quite as a complex of an audit as one with a large federal agency. 

Federal rules and regulations are known to change frequently and can leave your team confused or worse, complacent. Issues that may arise over the course of a contract are ones of government coding, invoice sequencing, and mathematical errors. Any incomplete, incorrect, or inadequate information can impact not only receiving payment but any future government contracts.  Ensuring that your government contracts are up-to-date, on-track, and error-free is essential to continuing business with them. 

About ContraxAware

group of professionals who manage contracts online

At ContraxAware, we understand the challenges businesses face with contract audits. Our leaders bring software development and legal experience to the table. Our entire team recognizes the value a contract software management system can deliver for better business management. 

Internal contract audits aren’t easy, but they are important to 

  • Catching mistakes
  • Alerting you to potential problems
  • Ensuring ongoing business partnerships

The better the contract management, the better the relations — and trust — with your business partner.

A contract audit is your company’s best opportunity for reviewing policies, along with evaluating and verifying contract terms. It also is an opportunity to inspect accounting transactions. The entire process has lots of moving parts and team members who are skilled in specific areas of the audit.

Easy to Use Tools

Centralizing the audit process is possible. ContraxAware provides the necessary tools you need to prevent confusion, avoid mistakes, and to alert you to tasks. It decreases and often eliminates the need for face-face meetings. 

Your team has enough on its plate. Gathering them for meetings or filling their inbox with countless emails can lead to them tuning out, rather than in, to this important project. No one has time to stop their busy day to search in a file cabinet for a particular folder.

ContraxAware has an easy-to-use dashboard that no matter when a team member comes on board, they are able to learn the software quickly. Built-in alerts keep the project, and team members, on task. The software provides a 360-degree view of the user’s assigned task and workload. The user can use built-in tools to drill down to the details of a specific contract. This process helps team members to focus better on their individual tasks. 

Built-in walkthroughs provide the training your team needs to get up-to-speed. Step-by-step instructions and on-screen prompts help walk users through the learning process. Also, eight hours of one-on-one internet training comes with the professional and above subscription plans. 

Let ContraxAware Make Your Internal Contract Audits Easier

Audits are a formal examination of the financial and account information of your business. Just mention the word “audit,” and your team may begin to roll their eyes. Don’t let this be the case with your team. Give them access to ContraxAware to help streamline the process and to better collaborate with others through the software.

Our team believes that internal contract audits are too important to not streamline through a software system. To take the importance one step further, contracts with the federal government, when they go wrong, can lead to investigations and possible criminal charges. 

Losing an important federal contract can financially devastate your business. Additionally, any difficulty with a federal contract, or any other contract, can hurt your company’s reputation. 

All this is preventable by centralizing your contracts in a contract management software system. Not only can ContraxAware streamline the process, but it can also:

  • Control of data collection and processes.
  • Ensure data integrity and consistency. 
  • Track contract tasks and set alerts.

Complete Contract Management in One Platform

ContraxAware is about more than just internal contract audit management. It is also a tool to help from the beginning of the contract, throughout the contract, and at the conclusion of the contract. It helps with procurement and can prevent costly mistakes. There is no time spent searching for invoices or other important documents on your desk. 

As multiple team members work on your project, our audit trail keeps the changes implemented throughout the process. This version control allows you to see who made what changes and when they made them. The time saved with this form of collaboration is invaluable for your business. 

Gathering your best team, setting objectives, and creating a checklist for your contract audit is a good place to start. Also, reviewing your company’s contract process is an added step that many team members may find helpful. 

Once you have these features in place, you can easily launch your internal contract audit process by utilizing the full benefits of ContraxAware. If you’re ready to learn more about how ContraxAware can help your business, contact us today. We have pricing plans to suit your budget. Don’t let your team deal with contract audits without providing the tools they need for the task. So reach out to our friendly and professional staff today by calling us at (800-460-9052. 

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