For organizations subject to frequent audits—whether internal, external, or regulatory—the ability to respond quickly and completely is no longer optional. Delays in locating contract terms, approvals, or documentation can raise concerns and cause unnecessary exposure.
That’s why many companies are shifting toward contract systems that do more than store files; they create a complete, trackable record of every step in the process.
Fragmented Processes Create Unnecessary Risk
In many companies, contract data is spread across disconnected tools and teams. Sales uses one system, legal another, and procurement
relies on email threads or shared drives. This arrangement may function during day-to-day operations, but it becomes a problem during audits.
According to World Commerce & Contracting’s “The ROI of Contracting Excellence” survey and report, contract-related information in large companies can span across more than 24 separate systems. When auditors request information, teams must pull data from each one, confirm accuracy, and compile it manually. This process is time-consuming and creates room for errors or missing details.
In the same report, more than 70 percent of companies said they struggle with internal coordination when trying to improve contract-related systems (1). Without a unified approach, audit readiness becomes reactive and stressful.
A Better Approach: Purpose-Built Contract Systems
A contract management platform provides more than just storage. These systems offer tools that create visibility, support review processes, and retain detailed records of all user activity. This means that by the time an audit occurs, the documentation is already in place.
The four major features of CLM that support audit preparation are:
- Templates that apply consistent, pre-approved contract terms
- Routing of agreements through required internal reviews
- Permission settings that protect sensitive documents
- Timelines showing every change, comment, and action taken
With these features in place, a company can present a full contract history without scrambling for back-up documentation. Organizations with contract platforms are also better able to monitor deadlines, obligations, and risks in real time—helping teams catch issues before they surface during an audit.
Compliance Doesn’t End at Signature
Some risks don’t emerge until after the contract is signed. Companies often overlook the importance of tracking ongoing obligations: service levels, reporting duties, billing accuracy, and performance expectations. These issues frequently surface during audit reviews.
The National Contract Management Association (NCMA) notes that in both public and private sectors, compliance is tied not just to the presence of a contract, but to evidence that the terms were applied correctly and monitored over time. Without proof of consistent follow-through, companies may find themselves exposed during a review (2).
Modern contract platforms help close this gap. Dashboards and alerts can notify users of upcoming deliverables, expiration dates, or policy triggers. This allows managers to act quickly, rather than learning about missed steps after the fact.
Legal Operations and the Push for Consistency
The Corporate Legal Operations Consortium (CLOC) has observed that more legal departments are investing in contract systems to meet compliance goals. According to CLOC’s 2023 industry report, legal teams that adopt contract platforms are better equipped to respond to audit requests, manage vendor obligations, and stay within regulatory guidelines.
The report emphasizes that contract tools offering reporting features allow legal and compliance teams to monitor status, obligations, and approvals—without the need for repeated manual checks (3). For organizations facing pressure around data protection, ESG standards, and cross-border agreements, this visibility matters.
Building Audit Readiness Into Daily Work
The shift toward contract platforms isn’t just about avoiding problems. It’s about creating systems where audit preparation is built into regular activity. When every agreement follows a consistent process, complete with time-stamped actions, required approvals, and automated tracking, a review becomes much easier to handle.
World Commerce & Contracting points out that most value loss from contracts comes not from flawed language, but from missed obligations and untracked risks. Their research shows that companies with clear ownership of the contract process and integrated tools are better positioned to reduce these gaps before they grow into compliance issues (1).
Where to Start
For teams beginning this transition, the first step is to map out current contract types and how they are managed. From there, compare how your process handles simple agreements versus more involved transactions. Gaps will become clear—especially where time-consuming workarounds or manual checks are still the norm.
By focusing on systems that track user activity, enforce review steps, and surface upcoming obligations, compliance preparation shifts from reactive to routine.
We would welcome the opportunity to explore ways that CLM solutions can help you be audit-ready without a scramble, contact us here.
Sources
- World Commerce & Contracting – The ROI of Contracting Excellence (2023)
- National Contract Management Association (NCMA) – Contract Management Standard Publication (CMSP)
- Corporate Legal Operations Consortium (CLOC) – 2023 State of the Industry Report (overview)
Full report available to CLOC members
