Contract Management Tip #1 : Establish a Contract Repository
This is the first blog in a series that will cover contract management best practices tips. Stay tuned for more in the coming weeks.
Managing paperwork is an inescapable aspect of doing business. Companies should implement a document management process from the very beginning to avoid misplacing critical items. This is particularly important with respect to company contracts because they direct many business activities, impact finances, and create legally enforceable obligations.
One of the first steps that companies should take as soon as they begin to enter into contracts with other parties is to establish a secure contract repository, and here are the five main reasons that doing so is both vital and beneficial:
There is perhaps nothing more aggravating than trying to remember where a document was saved or filed. And, when it comes to contracts, it is unacceptable to be unsure as to the whereabouts of something so important. By immediately establishing a contract repository, companies will know exactly where to locate a contract in the event that it is required.
Consolidating paperwork, especially company contracts, in a single online location ensures effective record keeping and eliminates the need to scour the company network or sift through file cabinets.
Although a central repository is critical to streamlining the storage of company contracts, any online repository will not suffice. Contracts contain critical, often confidential pieces of information that must be protected. As a result, companies that opt to establish a contract repository must ensure that the service they select offers strong and varied security measures, particularly advanced encryption and access control.
File cabinet drawers are far too easy to access (not to mention destroy), and even many internal networks fail to protect documents saved within them, but a reputable cloud-based solution will ensure that security is a top priority.
Even the most sophisticated paper-based contract management system (such as one that involves color-coding, indexing, cross-referencing, and frequent updating) cannot compete with the organizational superiority of an online contract repository. Digital files are much easier to drag and drop into folders and subfolders, tag, and highlight, and doing so does not necessitate any paper, tabs, or colorful writing utensils.
There is merit in keeping some business processes a bit old school, but contract management is not one of them.
Some companies may manage to keep paper-based files extremely organized and never lose a single thing, but that doesn’t mean it will be easy to find a specific contract clause at a moment’s notice. With an online contract repository, a quick search function enables users to find a contract and reference its terms quickly.
In the fast-paced business world, contracts need to be easily accessible and searchable. An online contract repository that provides advanced searching and filtering can save companies so much time and hassle and significantly improve contract management workflow.
Perhaps the second most aggravating thing (after trying to remember where something is located) is sharing information with parties that request it. In the case of a paper contract, this inevitably involves scanning and emailing said document. For documents already saved digitally, you only need to find it (which may or may not be easy) and then send it. However, once the contract is sent, it is out of your control and could easily be shared beyond your intended audience. This is problematic for contracts containing sensitive information.
Contracts that are saved in a contract lifecycle management solution that has a secure online repository, however, can be shared quickly and easily but with strict access controls on the document. This is obviously convenient when someone else demands to see a particular contract right away, and it is useful to know that the contract is protected so that only the intended person may access it. CLM software with more advanced security will also limit permissions around that document- full access, views only, etc.
Running a business involves a lot of moving pieces, so it is imperative for companies to simplify as many processes as possible to ensure maximum efficiency. Fortunately, there are solutions that facilitate the streamlining of contract management, and establishing a contract repository is the first step in achieving that goal.
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