CMG490 MOD 2 SLP Essay Example | Topics and Well Written Essays - 500 words

CMG490 MOD 2 SLP - Essay Example There is also a poor life cycle and workflow in the visibility of the contract. In the contract processes and procedures, there are no guidelines or templates that are proven for particular terms and clauses needed for different types and value of dollars in the contract. There is also an inadequate and insufficient reporting system to the senior management. Finally, there are high costs of staff that are incurred in the routinely carried out review or administrative tasks. Contract management is responsible for the excessive costs due to lack of the expiring contract dates that result into low rates of contract renewal. Insufficient performance monitoring and terms of contract lead to late fees, overpayment, and failure to collect discounts or rebates, and penalties. However, this inefficient monitoring may lead to failure in collecting late fees, underpayment, and awarding of unearned rebates and discounts on the part of suppliers. There are high risks involved in the contract resulting from non compliance. This is due to the lack of policies documented and incapability to show adherence to the written policies related to the contract. The company is also unable to determine if the supplier is complying with the contract terms and conditions. The contract risks also result from inadequate controls of ensuring that those writing contracts possess appropriate legal and risk management and/ or other appropriate mode of authorization before making changes to the terms and language of the contract. The contract risks are also associated with lack of automated reconciliation and integration with the financial systems. This may be due to the company’s inability to rapidly and routinely identify high risk clauses in the contract. In addition, the organization has no monitoring and reporting tools of contract