Contract management is a complex task, especially in large organizations that have large volumes of contracts. Contract managers strive to supervise performance goals, financial benchmarks, and risk management. Be sure to watch for these commonly overlooked areas of contract management.
Are contracts and other sensitive documents protected against cybercrime?
This question is especially important for organizations that are not currently using a structured, secure contract management system. Some organizations still rely on spreadsheets, local storage, and email to store and communicate contract information. One risk of using this method is that contract managers may overlook security measures, or assume that their local hard drive is adequately protected against malicious hacking attacks.
Choosing a cloud-based contract storage solution that uses secure servers is a better security strategy than storing contracts on a hard drive that may have less safeguards against cyberattack. A contract management system with user verification measures also helps increase contract security and lower risk.
Is the contract reaching performance goals and milestones?
It’s not uncommon for contracts to include special mention of specific performance milestones. There may even be incentives such as discounts associated with certain benchmarks. If neither party remembers to redeem a performance-based incentive, however, an organization can miss out on some of the value promised in their contract. By setting reminders for regular reviews throughout the contract lifecycle, contract managers have a better opportunity to course-correct a contract as needed or claim additional benefits associated with a contract milestone.
Has the scope, pricing requirements, or service needs of a contract changed since signing?
At contract signing, all signing parties agree on various aspects of the business relationship. In practice, a company’s needs often evolve over time. But demanding--or providing--services above and beyond the scope of a contract can be costly and damage the relationship. If updates are necessary, contract managers may need to communicate with key stakeholders about whether a mid-contract adjustment is the best solution.
Are internal reviews happening on schedule?
Reviewing contracts regularly is one of the best ways to get the most value out of a contract and catch any issues early. The contract manager is rarely the only person who signs off on a contract. General counsel, top-level decision-makers, and others may need to conduct periodic reviews. The contract manager may play an important role in managing these communications.
In the contract management system, admins can assign contracts to the applicable users. It’s easier to send auto-alerts this way since there’s less chance of forgetting to notify an important contact of an upcoming review. Contract managers can also review the audit log to see who signed on to view or update a contract, and contact anyone who still needs to check in.
What is the mid-contract assessment of the business relationship?
It can be easy to forget to check in on intangible contract benefits. The overall “tone” of a business relationship plays a role in whether the organization will renew the contract. Contract managers may find it useful to make notes in the contract file assessing the ease of working with a vendor, promptness of replies, and similar factors. A contract manager may be better poised to recommend that the company renew a contract, prepare specific points to renegotiate some aspect, or search for a competitor that may provide a better working relationship.
What compliance regulations have changed since contract signing?
Compliance is one of the most important risk management considerations for many contract managers. Industries that face numerous compliance regulations, such as healthcare, must stay up to date with new regulations to avoid penalties and other issues. Before a new compliance regulation goes into effect, contract managers should review contracts that may be affected and implement any necessary changes. Use tags in the contract management system to quickly search for contracts signed before a new regulation takes effect. Schedule auto-reminders as needed to make adjustments so transitioning to new compliance measures goes smoothly.
The Buyer's Guide to Contract Management Software
Quickly identify solutions to your specific contract management challenges.