5 Contract Management Practices Your Business Needs to Minimize Risk
Contracts are essential for protecting your business. However, if you aren’t using the right contract management practices, your business could still be facing significant risks, even if you have stacks of signed and executed contracts.
Using these five contract management practices will minimize your risks and help you get the most out of your existing contracts.
1. Make It Easy to Find and Review Your Contracts
You need a contract management system that allows you to find a specific contract instantly. Merely using a filing cabinet isn’t enough. The harder it is to find your contracts, amendments, and any riders the harder it is to manage risk appropriately.
Your contracts with partners, vendors, and customers are the backbone of your business. You can’t afford to have to spend half a day just trying to find the right paperwork.
You should also be able to quickly look up and find a specific contract from any device and from anywhere in the world. It certainly would be no fun if you had a contract locked in a filing cabinet half a world away when you are trying to smooth out a problem.
2. Keep Contracts Confidential
Your contracts are essential for your business, but not everyone in your organization needs access to every contract. You need a permission system that makes it easy for authorized members of your company to see the contracts that need to and makes it impossible for unauthorized users to access sensitive, confidential business information.
The best contract management practices balance easy access with tight security.
3. Set Alerts for Deadlines
Each contract your business enters into has a different set of deadlines. How are you notified and aware of when it’s time to renew a contract? What are the critical performance deadlines in your contracts with vendors and customers?
You cannot keep track of every contract deadline on your own. Having an automated system that reminds you of critical contract deadlines is an essential part of any contract management system.
4. Supervise Compliance
Are you meeting all of your contract deadlines? Is a customer trying to argue you missed a critical deadline or failed to live up to your promises?
Are you overpaying your vendors or suppliers when they are in breach of the contract? With strong contact compliance practices, you can reduce costs and risks for your firm.
But, you need a contract compliance system that makes it easy to supervise compliance.
5. Make Contract Review Efficient
If you are manually reviewing stacks of paper contracts, you are wasting valuable time and resources.
You need to make the contract review system as efficient as possible. That means automating as many parts of the process as possible. You shouldn’t have to be searching through filing cabinets or pouring through pages and pages of text to find important dates and contract terms.
You need a contract review system that combines the best of human oversight with smart, automated software that can help you instantly find the critical information you need to make a decision.
If you are looking for a more efficient contract management system that helps reduce your costs and risks, while improving your access to key documents and information, contact us today. ContractAware can help you streamline contract management.