Most people understand that when they enter into a contract with another party that one or both parties will be expected to perform some action. In some cases, one party’s performance may be fairly substantial and ongoing, such as providing a service on a continuous basis, whereas the other party may simply have to remit payments in exchange for receiving that service. This is obviously the simplest version of a contractual relationship, and these days, many business transactions are anything but simple.
A lot of companies engage in complex deals that require the signing of a contract to ensure that each side is legally bound and will be held accountable, but some of these companies are actually doing this on a high volume basis. It is hard enough keeping a handle on a few complicated deals, and thus attempting to juggle hundreds or even thousands of these arrangements means there has to be a comprehensive contract management approach. It is important to invest in an online contract management service and use contract insights to monitor a company’s contract portfolio performance, as explained below:
One of the first things that any company must do as soon as it begins to enter into contracts is create and implement an organized contract management system. Even if the contract portfolio is relatively small in the beginning, having a system that will be able to accommodate a growing portfolio will save time and money in the long run. In addition, saving all company contracts in a central, secure location makes it much easier to maintain adequate oversight and thus ensure proper performance.
As contracts are continually added to a central repository, it is important to ensure that they are assigned to an appropriate folder. Creating different folders and subfolders based on contract type, length, or content ensures that these important documents are safely stored and easy to find. Of course, in addition to dragging and dropping contracts into the correct folder, an online service should allow its users to create customizable tags. For example, contracts may need to be tagged based on where the client is located or the type of agreement it is, such as a supplier contract or a licensing contract. Between the folder names and designated tabs, it becomes faster and easier to sort and locate contracts, further facilitating oversight.
A contract management service with a reporting function can really provide insight into a contract portfolio, enhance the management process, and improve overall performance. The contract management team should be able to run reports based on unique criteria to ascertain where things in their portfolio stand. For example, the team may need to determine how many contracts with clients based in the northeast region of the United States will be up for renewal in the next thirty days in order to make arrangements for account managers to begin reaching out to those folks. A report can be generated by selecting the particular parameters and will quickly provide this information in a spreadsheet that can then be exported or shared.
In many cases, a team may not have the time to generate reports on their own and would benefit from a more automated system. For instance, if a certain type of report will be needed on a regular basis, such as in the example mentioned above, it is helpful to schedule recurring reports by selecting the pertinent parameters and then choosing the preferred reporting schedule, such as on a weekly, monthly, or quarterly basis. The more a team can automate certain functions without having to make a conscious effort to check and update a spreadsheet or calendar, the easier it will be to stay on top of important items and ensure timely performance.
Ultimately, a contract management solution should have features that eliminate the tedious aspects of managing a contract portfolio and allow contract management teams to retain oversight in a manner that benefits performance and thus the company’s bottom line.