Inefficient and fragmented manual contract workflows jeopardize a company’s bottom line due to missed renewals and expirations, non-compliance, communications gaps, non-standardized practices, and bottlenecks that delay contract execution. Thus, it should come as no surprise that more and more contract managers are now looking for ingenious ways to monitor contracts instead of sticking with traditional ways.
For the uninitiated, contract tracking is a process that involves analyzing various elements such as different versions, terms, and conditions. In addition, it entails identifying and rectifying any typographical errors while validating the legality of digital signatures along with maintaining key deadlines and milestones consistently throughout. Essentially, this approach allows for a systematic evaluation of a contract’s current status and helps identify any obstacles that may hinder its successful completion.
5 Tips for Effective Contract Tracking
Tip # 1: Centralized Contract Storage
Choosing a single location where all of your contracts may be kept safely and securely is unquestionably the first step towards efficient contract management. While it isn’t always possible to predict when old documents might require scrutiny, especially during contract creation, it’s essential to select a suitable document storage solution that guarantees quick file access.
Take cloud-based contract management software for instance. This technology acts as an efficient and secure digital warehouse housing all corporate agreements online. Just with any mobile device readily available, accessing vital contracts becomes almost instantaneous.
Tip # 2: Key Performance Indicators (KPIs)
After a new contract has been signed, it’s prudent to compile an exhaustive list that includes all important parameters that need careful monitoring over the full duration of the deal. This will allow contract managers to keep track of all contracts from the time they are created until they are archived after they have expired. Moreover, it would also be beneficial to confer with the owner of the contract thereafter to determine if there are any additional metrics, beyond standard ones, that warrant attention.
Throughout a contract’s lifespan, vigilantly tracking key measures is part of the usual process. Such metrics may include contractual obligations, critical dates like termination or auto-renewal, along with specific terms about termination and renewal. It also involves keeping an eye on high-risk clauses meant for re-negotiation or opting out, and any instances breaching agreed-upon terms of the contract.
Tip # 3: Strategic Planning for Dates and Deadlines
Contract managers need substantial lead time to thoroughly analyze prospective challenges and devise appropriate resolutions. For this reason, strategically planning ahead for time-sensitive milestones in your contracts helps greatly, when it comes to taking preemptive measures for optimal benefits.
Consider for example, a scenario where a contract is scheduled to expire in a few weeks. Here a contract manager’s possession of accurate knowledge about a contract’s expiration date is essential, as it provides them with ample time to consult with key stakeholders and decide whether to end, extend or revise the agreement. Contrarily, when a contract underperforms, unintentional oversights may accidentally lead managers and their teams to prolong it rather than cutting it off in good time.
Tip # 4: Transparent Communication With All Stakeholders
Monitoring contracts is an essential element for effective contract management. Equally critical is the assurance that everyone involved has open access to tracked data.
Every business transaction has the possibility to have monetary repercussions, and these repercussions can swing either way – good or bad. Hence, it’s important that people are enlightened with precise analysis and information about upcoming deadlines, responsibilities under agreements,and performance metrics for each contract. Stakeholders and decision-makers can then assess how well every agreement performs – whether buy-side or sell-side – and estimate probable financial profits or risks tied up within these contractual relationships.
Tip # 5: Contract Management Software Integration
The implementation of contract management software not only signifies a technology upgrade but marks remarkable progress toward streamlined operations.The platform has a centralized cloud-based repository where all contracts can be stored safely and securely. Additional features include pre-approved templates for contracts and interactive tools to edit them collaboratively in real time making contract creation, revision, and sign-off a matter of minutes.
Moreover, user-friendly dashboards provide tailored, detailed reports on various pivotal metrics related to your contract portfolio. It’s straightforward – these enlightening reports could then be disseminated with relevant parties based on an agreed-upon schedule seamlessly done within the system itself. As a contract manager, you’ll never miss any critical date associated with your contracts, be it for auto-renewal or opt-out window thanks to automated reminders and alerts.
Conclusion
Smaller firms with a handful of clients may find value in manual contract management. However, it certainly lacks the precision required by large corporations handling enormous contract portfolios. If your contract tracking systems are disorderly and inefficient, try the above fail-safe strategies to stay in control of your contractual obligations and track all your contracts masterfully.
Author Bio:
Qurat-ul-Ain Ghazali, aka Annie, is the growth manager at Contractbook and looks after all the organic channels. She has been with tech startups and scaleups for a couple of years with a B2B focus. You can find her socializing, traveling, indulging in extreme sports, and enjoying the local desserts when she is not working.