5 Tips for Effectively Tracking and Monitoring Contracts
Every contract manager has a system in place for tracking and monitoring agreements throughout the contract lifecycle. While some rely on manual methods, others find ways to automate parts of the process to save time and reduce risks.
However you decide to stay on top of contract details, there are best practices to consider that can help you accomplish these tasks more effectively. This article shares five tips for tracking and monitoring your contracts.
Know where your contracts are
The first thing you should do when preparing to track your contracts and their details is to be sure you know where all of your agreements are located. It might sound simple, but for far too many companies, contracts are not all stored in one location.
Wherever you choose to store your contracts - whether it’s a filing cabinet, a shared drive, or using contract management software - establish a system for organizing your repository so you can quickly find any agreement when it needs to be referenced or reviewed. This is a crucial first step that will impact everything else you do with your contracts throughout the life of each agreement.
Determine what you need to track
Once each new agreement has been executed, consider documenting every piece of important data that needs to be monitored so you can create a game plan through the time the contract is retired and archived. Meet with the contract owner to identify any special considerations beyond your standard list dates and deadlines to track.
Some of the common pieces of information to track and monitor during the contract lifecycle include:
Deliverables and obligations
Termination notice requirements
Be proactive, not reactive
Staying ahead of dates and deadlines and proactively looking for risks and opportunities during the contract monitoring process will help you remain in control of your agreements and obligations. By regularly reviewing your most important agreements and the specific areas you outlined in the previous section, you’ll have the best chance of catching any needed changes or corrections early rather than having to react to issues after they happen.
The reason it’s so important for contract managers to track deadlines well in advance is so there’s time to assess the situation before making a decision about next steps. For example, when you know a contract end date is coming weeks or months ahead of time, you can work with other stakeholders to make an informed decision about renewing, renegotiating, or terminating the agreement. If you overlook the deadline and only learn about it days (or less) before you have to take action, your team may not be able to dedicate enough time to fully understand what the best course of action is, and ultimately make a decision that negatively impacts the business.
Keep stakeholders informed
Tracking and monitoring agreements is a critical part of the contract management process, but you also have to make sure that the information gets to the appropriate parties. Contract management is a collaborative process, and effective contract managers communicate openly with stakeholders throughout the organization.
Approaching deadlines and deliverables might be the first things that come to mind in terms of what to share, but the importance of contract performance shouldn’t be ignored. Every agreement - whether it’s a buy-side or a sell-side contract - represents a financial impact to the company, which is why department leaders and decision makers need as much information as possible to determine whether each contract is performing as expected.
Streamline the process with contract management software
Tracking and monitoring corporate agreements becomes much more simple and streamlined when you incorporate contract management software into your process. Here are some of the ways contract management software can help you accomplish the recommendations in the previous sections:
A contract repository gives you a centralized place to store and organize your agreements so you can always find the documents you need quickly.
Custom reporting tools allow you to report on any data points in your contract portfolio and automatically send those insights to various parties on a recurring basis.
Alerts and notifications help you stay ahead of upcoming contract dates so you have plenty of time to take strategic action at the appropriate time.
To read more on the benefits of having dedicated contract management tools to help expedite the contract management process, download Online Contract Management 101, a free resource from ContractWorks.