8 Tips for Better Contract Management

Managing contracts is a vital element of most business operations. It’s critical to ensure the integrity of a contract, get it into the hands of the people who have to see it, and obtain secure signatures when everyone agrees on the terms.

So what steps can you take to make these processes smoother and more streamlined?

The Goals of Contract Management

Better contract management typically depends on several distinct objectives, namely:

·         Security. Your contracts need to be secure. If you’re discussing proprietary information, client details, and other sensitive info, you must ensure that no prying eyes get access to these documents. You also have to make sure your contracts can be signed safely and securely.

·         Efficiency. Contract management also seeks to improve efficiency. With the right system in place, your employees will be able to produce and modify contracts more quickly, to save time (and therefore money).

·         Convenience. Contracts should also be convenient for all the parties involved. It shouldn’t be a time-consuming hassle to sign a document – especially in the modern digital environment.

Tips for Better Contract Management

So what steps can you take to improve contract management in your organization?

1.       Use the right eSignature solution. eSignatures are faster, more convenient, and in many ways, more secure than conventional signatures – so it’s worthwhile to choose the appropriate eSignature software. Solid eSignature software will give you a host of features that enable you to manage different versions of a contract with ease, collect signatures, and verify the integrity of the signatures. Shop around to find the software solution that has everything you need without completely exhausting your budget.

2.       Work from templates. Most contemporary businesses manage their contacts through the use of templates. You create a template for each type of contract you normally put together and make selective modifications whenever you issue a new one for a partner, vendor, or client to sign. Just make sure your templates are on point – or else every new contract you create could have an issue.

3.       Build in additional flexibility. Contract writers often attempt to make their documents airtight by choosing their wording carefully and trying to guard against any conceivable threat. This isn’t necessarily a bad practice (especially if you’re concerned about future liability issues), but it can be somewhat limiting. It’s more often in your best interest to build in additional flexibility; for example, think about how you could write the contract in a way that allows you to add new sections in the future.

4.       Communicate proactively. Some contracts are notoriously difficult to understand, filled with legalese and technical terms that are hard for the average person to grasp. So part of your contract management strategy should be to include accommodations for people who might have difficulty parsing such dense language. Do your best to communicate what the contract is saying in clear terms and be prepared to answer any questions that may arise during negotiations.

5.       Rely on automated follow-ups. If you’re creating and distributing contracts that require the attention (and signatures) of a variety of parties, it can be hard to keep track of who has signed and who hasn’t – as well as deadlines that can result in even bigger problems if you miss them. Instead of spending an excessive amount of time on follow-up messages, try to automate this step. You’ll make fewer mistakes and save hours of time.

6.       Review and update contracts regularly. Your templates shouldn’t be chiseled in stone; they should be living, ever-improving documents. As you learn more information, new laws get passed, and older contracts reveal their weaknesses, you’ll be in a position to review and update your archive of contract templates on a regular basis. Make sure you take advantage of those opportunities.

7.       Anticipate the conclusion of contracts. Some contracts expire or must be renewed at regular intervals. It’s too much work for employees to stay on top of these deadlines manually. Instead, create an automated alert system that gives you plenty of advanced notice when a contract is about to expire.

8.       Collect feedback and improve. It’s always a good idea to collect feedback, both from employees and from clients and customers. Use surveys to figure out how people feel about the contracts you’ve created and managed – and whether they have any ideas for how to do them better in the future. Then, employ this information to devise new systems and approaches, and make the necessary improvements.

Many individuals on your team may be at least partially responsible for managing contracts, whether that means adjusting templates, talking to clients about the terms, or following up to get a signature.

Accordingly, it’s vital to train and educate all of them to adhere to your new standards of contract management. Your contract systems and processes won’t be perfect from the outset, so keep yourself and your team open to improvements and adjustments in the future.

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Photo by Sebastian Herrmann