Do you know where your contracts are? Vital to the financial health of your organization, contracts are a valuable resource that can often be overlooked. Without a properly structured contract management repository, you and your legal team risks missed deadlines which can lead an inability to tap into new revenue opportunities or the chance to renegotiate for more favorable terms. A missed deadline can also result in expensive unneeded autorenewals and other recurring costs. In contrast, when prioritized and optimally managed, contracts can become a considerable asset for your team and C-Suite level management.
It’s clear contract management systems can improve organization and boost productivity, and part of that success lies in starting out strong by creating an effective, easily manageable contract repository. With a structured contract repository, you can proactively manage your contracts in ways that will improve performance and deliver innumerable benefits in terms of growth, productivity, and earnings potential.
With so much on the line, it’s important to implement a contract management repository strategy that will help you stay organized and leverage your resources effectively.
Here are 4 tips to help you get started:
1.Create a Controlled Document Repository
Creating order out of the chaos of your contracts begins with consolidating all your agreements into one secure, central location. For companies who do not have a dedicated central contract repository, it is not uncommon for contracts to be scattered in various places, including desktops, email, and occasionally filing cabinets. Without a central place to store and manage contracts, the risk of misplacing a contract or losing the most recent version is very real and could have disastrous consequences for your business. Finally, keeping your contract data secure is critical, so choose a contract storage system designed to safeguard sensitive information and outfitted with the latest security protocols including data encryption, access control, multi-factor authentication, and audit trail reporting.
2. Create an Organizational Framework for Your Agreements
Searching for contracts is easier when there’s a standard way to identify the information they include. One way to do this is by using the tools available in contract management software to create specific data fields, like company name, signees, address, autorenewal or billing date, contract owner, and more. Also called tags, these data points can be used to create lists, run reports, generate e-signature templates, and establish milestone alerts. In order to avoid confusion, it’s important to create a high-level guide or tag library defining which content needs to be tracked. When a document is uploaded into the contract management software system, users can then choose from this library so that your data tracking remains consistent across documents and departments. Many software solutions can help automate this process by tagging and tracking data automatically.
An organizational framework will also help you set parameters to keep document organization consistent. Your framework should include:
- Standard Naming conventions
- Acceptable Date and time stamp format
- Storage Guidelines
- Procedures for updating, deleting, or renaming files
Resources such as document creation templates, filing keys, and archiving procedures are also essential. Clarifying where to store outdated files reduces the risk that someone will mistakenly delete or overwrite a document that may be needed in case of future audits.
As you upload files to your repository, remember to implement appropriate alerts and notifications, not just based on deadlines within the contracts, but also use your department’s internal milestones for review and management. As physical documents are scanned and digitized, add all the details you can and tag your document based on type, signee, status, or any relevant category that makes sense for your business. Finally, as you transition over to a contract management system, make sure you keep staff up-to-date on the latest functions and features available and enact a proactive management approach so that your repository is always up-to-date and relevant.
3. Create Automated Processes
The right contract management should reduce unnecessary tasks so your team can spend more time working on higher-value projects. Creating a shared, electronic system can dramatically reduce the amount of time spent tracking down files or sharing agreements between members of your legal department. Automated reporting can also help you capture details, like who accessed or changed a file or what agreements are still awaiting a final signature. Finally, by optimizing every automating opportunity, you can make it easy to manage deadlines and maintain oversight over documents that may need to be reviewed by multiple parties before execution.
4. Optimize Document Security
A company’s agreements are its lifeblood. Everything, from strategy to contracts to financial records, is kept in writing. Losing even a few hundred documents (or fewer, depending on the document) could render the business unable to function. Maintaining security is paramount.
Contract security starts by storing important files in a password-protected system, with user verification measures in place. Setting up password locks on the computers adds a layer of security, and the security cameras a business uses to guard the building itself add another. At this point, a Mission-Impossible-style thief would have to break into the building, hack the local computer password, and get past the software security measures to finally access the files.
But what if it’s not a hacker, but a hurricane? This is where cloud-based document storage comes to the rescue. Offsite servers are safe, even if local hard drives are destroyed. Using a storage system that protects against both human and natural threats is optimal to maintain security.
Electronic systems have several advantages over hard copy file storage. For one, they take up less physical space, which saves costs. They’re easier to search. Finally, with multiple backups and the latest security protocols, electronic systems allow you to maintain a single source of truth for your contracts so that the integrity of each agreement is ensured. With the ability to customize permissions, you can also make sure your contracts are only accessed by approved parties and that modifications can only be made by those authorized to do so.
Keeping an Eye on Business Objectives
You want a contract management system to improve efficiency and organization in your company. But it’s not quite as easy as purchasing a software program. To get the most out of your new system, you need a clear sense of what the end result should look like.
While you’re researching options (or even before), evaluate the business’ current needs. Which aspects of contract t management do you want to improve? What would a successful outcome look like? Defining a clear set of needs to address ensures that you won’t implement an entire software program only to discover more bottlenecks and issues. Clear targets make it easier to measure results and demonstrate the ROI.
Whether you already have your contracts stored online or still rely on spreadsheets and filing cabinets, transferring your documents over to one centralized system is the first step towards creating a fully optimized contract repository.
Ready to gain better control and oversight over your contracts? Download The Buyer’s Guide to Contract Management Software and learn how to evaluate your current contract management processes and discover the best way to vet and select the right solution to fit your needs.