Effective contract management and tracking systems can enhance every business’s efficiency, yet many organizations fail to incorporate them into their operations. Surveys and statistics show that the contract management techniques that more than half the organizations around the world use are far from effective. Many deals are stalled every day because of lengthy contract approval procedures, which negatively affects all parties involved. Very few businesses use designated contract management tools, which reflects the need for improvement. Hundreds of businesses struggle to execute successful contract management and tracking procedures, and that is why we are here to explain how you can effectively manage and track business contracts.
Regardless of the type of documents, both hard-copy and soft-copy documents should be located in one centralized location. Make sure to designate an area for contracts, create a filing system that works for you and your team, label the contract files, and frequently shred the files that you don’t need anymore. For soft-copy documents, use a specialized contract management system software. This makes documents easily accessible for whoever needs them, leading to a better workflow and increased productivity at every step throughout the process. This way, your team wouldn’t have to spend time and effort tracking down contracts with all their sections and versions, or panicking over ones that have gone missing. Missing or lost contracts can be a disaster waiting to happen.
Efficient Contract Signing
Contract signing is not as simple as it may sound- or as it should be. This process is usually the bitter cup of contract management, as key documents remain neglected on desks for days and weeks ahead. If the contract signing phase is inefficient, nothing will move forward. Wet or electronic signatures, you must find out what works for the other party and get started right away. If the contracts don’t get signed immediately, the process will just keep on getting delayed.
Tracking Milestones and Deadlines
One of the hardest things about contract management is keeping up with all the deadlines. You have deadlines for renewals, expirations, and other key dates that you can’t possibly keep up with on your own. Businesses are also expected to keep track of the milestones of each project to determine whether or not their goals have been achieved and dictate how far along they are. Without an intact system that helps you monitor these changes, your organization’s reputation, financial stability, and legal compliance could be at stake due to missed deadlines and accompanying penalties. The software developers at Contract Hound explain that contract management software allows you to track all important milestones and deadlines. Contract management software is easy to use and will keep all your deadlines and milestones organized and easily accessible at all times.
You should always work on identifying KPIs or key performance indicators along with relevant metrics. This will allow you to evaluate your business’ performance along the way. This is relevant to contract management because it also gives you insight into how your contract management strategy and process is performing. This way, you will be able to identify weak points and work on implementing improvements. You should keep an eye on your contracting cycles’ length, your ability to meet deadlines and milestones, the quality of contract partners’ relationships, and how cost-effective your contract management system is. Based on the collected data, you should work on optimizing future clauses and language in agreements, learning from past faults, and identifying success so that you can keep them up. This will help you quickly breeze through all the contract phases, allowing you to redirect your focus toward other important aspects of your business.
Keeping Data Safe
The most important aspect of contract management is keeping data safe from breaches and malware. Leaked data can severely harm your business and will make you lose many clients. Confidential information should be effectively safeguarded against cyberattacks. You should consider implementing a cloud-based contract management software that is secure and allows you to set roles and determine the members who have access to specific files. Cloud-based services are very easy to use, provide backup and recovery, and will keep all your documents organized.
Every business needs a cohesive and robust contract management strategy. With the right tools and strategy, managing contracts will be a walk in the park. With automatic reminders, a clear and centralized contract storage system, an efficient contract signing procedure, regular performance assessment, constant tracking of deadlines and milestones, and safe storage of sensitive data, you can manage your business contracts quickly and effectively.