Published on March 9th, 2022 | by Sunit Nandi0
3 Mistakes to Avoid with Your Company’s Contract Management Processes
Inefficiencies with the way your business handles contracts can lead to significant problems when it comes to both performance and customer satisfaction levels. Unfortunately, managing contracts can be a time-consuming, complex, and daunting task.
For years, complex paper-based processes have led to issues ranging all the way from long approval times and backlogs to problems with missing information. When the flow of new partnerships is a significant part of how you run your business, it’s important you have the right contract management strategies in place to avoid the common mistakes that today’s companies face.
Here are just some of the mistakes you might encounter in your contract management process, and what you can do to avoid them.
Mistake 1: Constantly Recompiling Contracts
One of the most time-consuming processes in contract management is compiling the various pieces of paperwork you need. Countless companies waste time on re-compiling the same annexes and contracts over and over again. This is a huge time investment for your team which could be focused elsewhere, like the core competencies that grow your business.
Recompiling the same contracts regularly can also increase the chances of errors being made. When employees have to do repetitive tasks frequently, their engagement levels can drop, and human error can spike.
The right technology can allow business leaders to create indexed libraries of commonly referenced documents for accompanying paperwork, from reports to statements. You can use a similar repository to create commonly-used templates for contracts once, and then use the same templates every time in the future.
For instance, you can create templates for employment contracts, consulting contracts, and sub-contracting purposes, and place them within the cloud in your contract management system. Whenever a new instance emerges where you need to use one of these templates, you can simply access the template and update it with the appropriate information.
Mistake 2: Lacking Proper Version Control
This is a common problem with paper-based contract management processes. When you’re dealing with paper-based contracts, it takes a significant amount of time and effort to keep everything up-to-date and efficient. Even when drafts exist as Word docs attached to emails, you can’t go back and double-check the information on a contract or roll versions back if something goes wrong.
It’s not uncommon for companies to have various versions of contract drafts that they’re dealing with at the same time. This is particularly common now we’re working in more distributed environments. In these situations, it’s difficult to know for certain if you have the latest version of the information.
The inability to manage and update contracts efficiently is one of the major reasons why many companies are beginning to rely more heavily on software for the contract management process.
Digitizing your contact management solution ensures you can always check you have the most recent version of the information in front of you. At the same time, you can access a full timeline of information to help keep track of what’s been happening with the document in question. For instance, some contract management tools will allow you to instantly see which drafts have been approved, updated, and passed on to other members of staff.
Mistake 3: Failing to Ensure Access Governance
Ensuring that your contracts are secure and can only be viewed by authorized parties is critical to the success of any agreement that’s still under negotiation. Unfortunately, when you’re dealing with old-fashioned document management solutions, it’s difficult to know for certain what’s going on with your data.
Without the right technology, you’ll also struggle to ensure that the right documents are approved, stored, and filed at the correct times. A comprehensive digital document management solution can come with a range of tools to create more secure and compliant workflows.
Even if your employees aren’t working in the same office, you can set up processes which remind each member of your team to sign off on their part of the contract management procedure in the right time period. Not only does a solid contract management solution help you to avoid the compliance headaches of missed deadlines, but it can even allow you to set up checklists which ensure you prevent errors in the use of various documents.
Your checklists can give you a step-by-step overview of everything you need to double-check before you finish processing a contract. This reduces your risk of having to deal with the repercussions of a mistake when conducting an audit at a later stage.
Addressing Contract Management Pitfalls
Virtually all of the most significant and common contract management mistakes made by businesses today can be rectified with the use of the right technology. Whether you’re struggling with poor visibility into the document workflow for your team, or you’re sick of constantly re-compiling contracts and accompanying documents for the same crucial purposes, a dedicated contract management system can help.
With the right technology, companies can enhance, optimize, and even automate aspects of their contract life cycles, increasing efficiency and freeing up critical resources along the way.