Essential Guide to Contract Management
When a business makes an agreement with a vendor, a client, or a partner, a contract is formed. Operating without a contract doesn’t only put you at risk of volatile business relationships, it can be illegal.
Contract management allows you to oversee the process of contracts from beginning to end. From the creation of the contract to ensuring adherence to the agreements laid out, it can streamline the process and help to ensure compliance across the board. Here’s what contract management entails.
Outline your process every step of the way
Contract management is done in steps. First, you need to write the contract. Then, all stakeholders must have the chance to review and negotiate it. This leads to the creation of service level agreements that allow you track adherence. Following that is the signature process. Then come any necessary changes and documentation as your relationship develops or problems arise.
Contract management allows you track individual contracts every step of the way. You can see which stage a contract as in, as well as deadlines looming, so you are always taking action when necessary.
Ensuring contract security
Digital contract management software makes it much easier to ensure that your process doesn’t involve undue risk. Using a Cloud system instead of paper, for instance, allows you to decrease the risk of damage to the documents and tampering. What’s more, with paper documents or individual copies stored on hard drives, it’s much harder to ensure that different parties don’t have different versions with discrepancies.
Access and archival
One crucial part of contract management is figuring out who, exactly, has access to those documents and who is making changes. Contract management systems make it much easier to allocate access to the documents stored on the Cloud. You can see not only who has reviewed the document and when, but you can also decide who has read-only access and who can edit it. By having a document that anyone can edit when they want, the “too many cooks spoil the broth” scenario is a more pertinent risk.
What’s more, digital contract management systems make it much easier to archive older versions. If someone is given access to edit when they shouldn’t have been or a mistake is made, you can review an older copy and see exactly what changes have been made so you can amend it.
Making compliance easier
The different stages of the contract management process can have actions attached to them so that you make sure you don’t progress to the next stage without ensuring you’re compliant. For instance, you can make it so that you don’t proceed to the signature stage before the stakeholders have had the chance to review and agree to the terms informally, first.
If you’re signing contracts, you need a contract management system. It can save your business a significant amount of time and money, as well as decreasing your risk of difficulties that can not only be costly but put you on the wrong side of regulatory compliance. Implementing contract management software is a smart move, no matter the size, structure, or industry your business is in.