An inefficient contract management process leads to poor customer experience, unproductive partnerships, missed deadlines, overloaded employees, and increased costs. Here are five ways to streamline your contract management process.
What is the contract management process?
The contract management process is the set of actions needed for secure and systematic administration of contracts from managing the initiation to handling expiry. The contract management process includes normally contract phases such as 1. contract request/initiation, 2. contract creation and authoring, 3. contract negotiation and review, 4. contract approval, signature, and execution, 5. contract monitoring, 6. amendments, 7. contract renewal, and finally 8. contract expiration. From another angle, the contract management process starts with establishing governance and the team, then planning and executing contract management, and ultimately managing relationships and contract performance.
1. Contract templates
Are you constantly re-compiling similar contracts or annexes? This can take needless time and effort and can be remedied quickly. Have you thought about standardizing and automatizing your templates and processes? If not, there is your quick fix!
Companies often spend too much time trying to jump on a bike when a problem could be fixed almost immediately: take time to draft commonly used templates like ones for employment, subcontracting, or consulting and place them accordingly in your contract management software.
Whenever the templates are being modified, the new versions are instantly accessible for every employee. There are intelligent tools that help you automate your content creation process and workflows. Try out Docfusion, for example, which includes amazing features like a drag-and-drop designer, a workflow engine, managed legal clauses, and corporate identity libraries.
2. Up-to-date contracts
It’s not that uncommon for companies to have several versions of contract drafts and annexes running around during contract negotiations. It is detrimental to your contract if you end up having an unfinished and version B annex attached to your contract. Some of the clarifications and items agreed upon might be left out from your contract without you even knowing it.
Therefore, it is imperative for you (and for your technical experts) to make sure that the latest versions of all the documents are the ones that are included in your contract material – this applies also to the negotiation phase so that items already decided are not negotiated twice!
3. Involving the right people
Legal teams often leave out the contextual experts from contract drafting: “Let’s not bring them here since they are only causing confusion and asking silly questions.”
This can be a costly mistake as the project team should be the one truly understanding the implications behind the technical statements. What is actually promised?
Usually, most of the contractual disputes are related to actual work and not on single contract clauses, one cannot highlight enough the importance of getting the technical team on board with the contract drafting. In fact, they are the most important people of your contract team!
4. Re-evaluating the company's approval process
Getting the approvals from the right people is one of the most time-consuming steps in contract management. Make sure your contract drafts are in centralized locations and not in numerous email threads or personal hard drives. In addition, use automatic calendar reminders to ensure the appropriate workflow. With certain contracts, you can even automate the contract workflow. This is especially handy with high-volume contracts that don’t require a lot of customization.
Sometimes missed deadlines can get expensive as the client might withdraw from the process.
5. Checklists to prevent errors
How to minimize errors even when hiring new employees? Invest time in setting up a point-by-point checklist for key contract management processes to make sure that no detail is overlooked or forgotten. By doing this, you might also find your own errors and see how the contract lifecycle of clients could be improved.
Forward-thinking companies can reduce a lot of costs, mitigate risks and increase profitability. Learn more about the best contract management software for small and medium-sized businesses as well as about the contract management software pricing.