Many companies don’t know how to conduct contract reviews properly. With the following tips, we’ll show you how to review all your contracts and documents efficiently — so that nothing is ever overlooked or lost again! We’ll also explain what contract review actually is, why it’s important, and how artificial intelligence can support you in the process.
Contract reviews are crucial for companies operating in a globalized environment. That’s not surprising — these reviews require a lot of attention and take up significant time.
Employees in legal departments face enormous effort when it comes to understanding and interpreting contract contents. They read documents line by line, searching for key clauses, and cross-referencing with law books and relevant court decisions.
It’s fair to say that reviewing large volumes of contracts can be a real nightmare for most legal professionals.
But in an era of innovative technologies and artificial intelligence — why should employees still have to deal with such time-consuming manual processes?
In this article, we’ll explain what matters most in modern contract review and what you should know to make your process more efficient. We’ll also show how implementing a contract management tool like Inhubber can transform your contract review workflow — enabling large-scale reviews to be completed faster than ever before.
What is a contract review?
In everyday business, we enter into countless contracts and fulfill them as agreed. However, there are cases where one of the contracting parties feels unfairly treated after signing. That’s why a detailed examination of all contract contents is so important.
A contract review is an analysis of all contractual data to draw conclusions and make informed decisions.
There are many reasons to analyze your contracts — including regulatory changes, financial transactions, or current events such as the coronavirus crisis.
Depending on the type of contract, different requirements must be met. A violation of these requirements can lead to invalidity or even nullity of the agreement.
In general, a contract review assesses how successfully a company’s contracts have been fulfilled and complied with by all parties. Its purpose is to identify potential problems or risks related to the quality, compliance, or execution of one or more contracts.
Contract reviews are typically part of quality assurance and can vary in scope and level of detail depending on their objective.
But what types of contract reviews are most relevant for growing companies — and how can you make your contract review process more efficient in 2022? Let’s find out.
Different types of contract reviews
The purpose and nature of a contract review can vary depending on a company’s strategic priorities and the specific circumstances of the review. However, there are three common types of contract reviews that most organizations conduct:
1. Contract performance audits
A contract performance audit examines how well the contractual goals and conditions have been met by all parties involved — and whether each party has actually fulfilled its obligations. This type of review also helps verify compliance with specific regulations such as data protection and information security laws.
2. Clause audits
A clause audit, also known as clause review, focuses on evaluating all terms and clauses used in contracts.
The goal is to identify incorrect, outdated, or inconsistent terminology. This allows the legal team to determine where contract terms need to be updated in line with the legal, economic, or strategic environment of the company.
3. Cost audits
Cost audits are carried out to ensure that all costs and prices are billed accurately — ensuring that clients are neither overcharged nor undercharged.
What is the purpose of a contract review?
A contract review serves multiple purposes, and regularly reviewing your contracts can bring numerous benefits. It enables your company to:
Manage and evaluate costs
One major advantage of regular contract reviews is ensuring that your company doesn’t overpay agreed amounts and that all costs are thoroughly verified. Reviews can also be useful for creating forecasts. They help the legal department support the finance and commercial teams in effectively controlling expenses.
Even the smallest numerical errors can lead to significant issues. That’s why it’s crucial to identify them early to optimize financial performance.
This evaluation also allows you to negotiate better rates when renewing contracts, giving you the flexibility to manage costs on a case-by-case basis.
Extract and document contract data
During and after a contract review, one of the key questions is where to store the results — and how to do so securely. In manual review processes, contract data is often entered into Excel spreadsheets. However, many underestimate how unsuitable Excel is for contract data management.
Excel is not designed for managing contract information. It still requires extensive manual data entry, and as a static file format, it makes it difficult to transfer data seamlessly to other systems or platforms.
What alternatives exist to make contract review easier?
After extensive market research, we can confidently say that Inhubber offers by far the highest standard of security and efficiency for contract management and review.
At Inhubber, we are redefining the way contracts are reviewed. Our blockchain-based solution uses advanced artificial intelligence to analyze contracts quickly and accurately. As a result, our customers and partners achieve their goals faster — with clear, structured insights and complete transparency.
Among our clients and partners:
Our mission is to be the most secure and innovative software provider worldwide, dedicated to contract management and review. In the world of technology, empathy and trust are at the core of what we do. Our philosophy is to always put the human aspect before data, processes, or technology. We firmly believe that companies can only succeed through close collaboration with their customers.
That’s why we develop our solutions together with our users.
With Inhubber, you can securely store all your company’s contracts in an organized workspace. All relevant agreements are available in one single location — eliminating the need for legal or procurement teams to search across multiple shared drives. This approach prevents problems and errors related to version control and document duplication.
Powerful search functionality
The user interface is designed to be minimalist and intuitive. Advanced search capabilities and customizable workspaces make it easy to query specific contracts, filter documents by values, or sort them by departments. In addition, access permissions can be granted within these workspaces to ensure that only authorized users can view or edit contracts.
Analyze contract contents within seconds for precise contract reviews
Manual contract reviews often carry the risk of missing deadlines or obligations.
With Inhubber, this is no longer an issue. Users can enter key information — such as due dates or contract values — into dedicated metadata fields.
This means you can not only create and filter table views to display specific contractual obligations, but also set up automated reminders for certain commitments. These reminders can notify you — or even your contract partners — at exactly the right time, ensuring no deadline or obligation is ever missed again.
