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How to Keep Track of Changing Terms During Contract Negotiations

How to Keep Track of Changing Terms During Contract Negotiations

by admin
February 24, 2020

The redline stage of the contract negotiations process — when you’re still making and tracking changes to your contracts as you work with your client — is one of the most vital stages when it comes to keeping track of changing terms. Your contract may go through multiple incarnations as you work to determine the best approach for both you and the other party. Whether you’re dealing with a vendor or a client, tracking the entire of your business relationship matters (and we have a guide for managing the contractual history here). This process is crucial to reaching a contractual agreement that fulfills everyone’s needs. But it can also pose a number of difficulties when it comes to tracking both past and future versions of the contract. Read these tips to organize your current processes.

1. Utilize version control.

The ContraxAware platform utilizes version control to make it easy to track the latest changes and alterations to a given contract. It can also help you keep up with the current version. Version control offers several advantages during contract negotiations:

  • You can easily locate, at a glance, the current version of the contract.
  • You can see past versions of the contract easily. This can make it easier to revert back to previous terms or negotiate with the other party.
  • You can see who made changes to each version of the contract. Strong history records make it easier to track what you have changed and what the other party has changed. You can also see who within your organization has made specific changes to the contract.
Also Read  How to Manage Your Business Entity and Subsidiary Documents in Your Contract Management System

Version control doesn’t just make it easier to keep up with all the changing terms of a contract. It can also streamline the approval process. Version control makes it easier for everyone to see who made alterations and when they were made. 

2. Take advantage of extensive cloud storage. 

Having adequate storage for your contract management system is critical to tracking and managing all the changing versions of a contract. When you’re dealing with inadequate storage, you may delete old versions of contracts in an effort to clean things up. But you shouldn’t have to reduce the footprint of each individual contract. 

Unfortunately, this practice makes it incredibly difficult to keep up with past versions of the contract. This can prove problematic if a change is made that either you or the other party doesn’t remember. It’s also problematic if you need to go back and review the other versions of a contract for any reason. With extensive cloud storage, on the other hand, you don’t have to worry about storage space. You can keep up with every version of your contracts. It doesn’t matter how many incarnations the contract goes through before being signed by both parties. 

Cloud-based contract management software makes it easy to keep up with every amendment made in a contract before it’s approval. Also, it can allow you to track past contracts with specific vendors or clients easily. You can track:

  • How costs have changed over time.
  • What alterations you’ve made to your contracts.
  • How your relationship with that entity has changed since previous contract negotiations. 
Also Read  Best Practices for Preparing a Contract Administration Plan

3. Create an effective amendment process. 

What happens when one party has already signed the contract, but the other hasn’t — and wants to make a last-minute change to the contract? Just like your business needs an approval process that allows essential members of the company to see the contract before it’s approved, you need an effective amendment process that will allow you to handle last-minute amendments to the contract. This may include the following revisions to your contract negotiations process.

Allow some minor changes without the contract needing to go all the way through the approval process again. 

You can allow drop-down menu changes to control modifications. Alternatively, utilize your contract scoring system to help determine what changes you can agree to. This gives you the flexibility to accept last-minute changes without risking your business. 

Trigger an alert for the individual who must review and sign the final contract. 

Last-minute contract amendments may require faster approval than the original contract. Not only that, if there’s a specific individual in your company who must sign off on a final contract, they may believe that they’ve already signed off on the contract. This slows down the process of contract negotiations. Make sure that your changes trigger an alert to ensure that the contract gets approved quickly. 

Highlight the latest changes and amendments to the contract, especially when it has to go back through the approval process. 

Checking amendments to a contract can be more difficult than ensuring that the initial contract meets the business’s needs. Use your contract management software to highlight the changes made to your contracts. This calls attention to exactly the areas where it needs to be. Many of your contracts go through numerous changes before you and the other party finally sign them. With these strategies, however, you can more easily track those changes. More importantly, you can continue to create effective contracts that meet your business’s needs. Also, our software makes it easier to ensure that, once you sign the contract, you keep up with the final terms.  Schedule a 1:1 demo to learn more about how ContraxAware can help you manage your contract negotiations.

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