CLM audit stands for Contract Lifecycle Management audit. It refers to the systematic review and examination of the contract lifecycle management process within an organization. Contract lifecycle management involves the management of contracts from initiation, negotiation, and execution to termination or renewal. CLM audits are conducted to assess and evaluate the effectiveness, efficiency, and compliance of the contract management process.
A CLM audit involves a comprehensive analysis of various aspects of contract management, including contract creation, approval workflows, contract terms and conditions, contract storage and retrieval, contract performance monitoring, and contract termination or renewal processes. The purpose of the audit is to identify any gaps, risks, or inefficiencies in the contract management process and provide recommendations for improvement.
During a CLM audit, auditors typically review contract management policies and procedures, contract templates, contract databases or systems, and contract-related documentation. They may also conduct interviews with contract managers, legal professionals, and other stakeholders involved in the contract management process.
The findings and recommendations from a CLM audit can help organizations enhance their contract management practices, mitigate risks, and ensure compliance with regulatory requirements. It can also help improve overall efficiency, reduce legal and financial risks, and optimize contract utilization within an organization.
In summary, a CLM audit is a systematic evaluation of the contract lifecycle management process aimed at identifying gaps, risks, and areas for improvement in order to enhance efficiency, compliance, and overall effectiveness of contract management within an organization.
