5 Tips to Improve Contract Management
Our 5 Best Tips to Improve Contract Management
Dealing with contracts is a huge part of doing business responsibly. While most companies tend to have some form of contract management, it’s often terribly inefficient. Companies lose nearly 10% of their annual revenue because of weak internal management of contracts. This failure to plan causes losses in missed reductions in costs, time, and opportunity. To avoid these issues, here are 5 methods for handling contracts.
1. Create templates
Creating contracts is time consuming. Even if you do the same types of contracts repeatedly. When the same contract is used often, you can copy and paste. You still have to read through the contract to make sure everything reads correctly. As a result, the quality assurance process is carried out before any other parties have even seen the document. Reading, and re-reading every contract is time consuming, especially when you have to do it with every update
The solution is to create a series of contract templates. When dealing with redundant contracts like employment agreements or vacation rental leases, only specific parts need differ from contract to contract like the rental dates, payment amount, and contract parties. This removes the need to look over the contract after each draft.
2. Streamline processes for attestations and approvals
Before your contract is signed it must be approved by management. Most often, it’s not the creation of the contract or the signing that wastes most time so much as waiting to have the document approved! Unfortunately, these delays can lead to lost business.
Once again, automation and templates make the best possible solution. Now that everyone knows what the contract says in advance, authorized employees only need to approve certain areas that are always changed. You can even go so far as to produce a workflow that notifies the needed person whenever the documents are ready to be viewed.
3. Use Electronic Signatures
It’s safe to say that signing documents manually can be a massive time waster. There is now little reason to send, receive, and archive physical documents. Manual signings are especially more difficult when parties demand to be in the same room with one another. Today’s businesses need to move quickly and efficiently. This makes electronic signatures a very valuable tactic in streamlining your contract process. They allow entire teams to shorten the time spent on managing paper, archiving, and scanning
Electronic signatures are completely legally binding in 99.9% of all cases. They are compliant with regulations within the European Union as well as in the U.S. In fact, unless you’re doing land deals in Sweden, there are few times you’ll never need to use a live signature over an electronic one.
4. Easy Archiving Of Contracts
On average, 10% of contracts in a corporate environments have totally disappeared. This is in large part because contracts are often spread out over the organization, and they can end up in the most unlikely of places. Some in physical binders, some in the cloud, and some in an email inbox. Keeping up with all the contracts is very difficult.
Companies need a solution to keep up with wayward contracts. Digital archiving makes previous documents easily searchable. Just a few key strokes and you can find whatever you need.
5. Automated Reminders and Alerts Calendar
No matter the size of a company, there can be a lot of stress surrounding contracts.
Creating a digital calendar to handle the needs and demands of contracts can make it much easier to stay on the ball with what needs to be done, and when.
As soon as the contract is signed, create calendar updates for when certain elements need to be renegotiated or looked over. This small item can mean the difference between success, failure, and lawsuits. In the efforts of mitigating risk from missing any alerts (like in the case of staff turnovers),you would ideally possesses at least two persons with proper access to the calendar. This is of paramount importance for long-term contracts.
The Takeaway: Improving your handling of contracts will benefit your entire business. You will move more quickly, run into fewer problems with communication, and ultimately run a more profitable business. Automate and template as much as you can, and store everything digitally. You’ll thank yourself later.