While contracts are a hugely important part of every business, content management can sometimes fall by the wayside. Managing contracts can vary by industry depending on if you’re working with clients, suppliers, staff, purchasing software, security, marketing, etc. That said, most industries face the same types of struggles in managing their contracts efficiently and effectively.
Here are the four ways that businesses struggle with contract management
1 Security issues
Contracts are legal documents, and therefore their security and confidentiality are fundamental. Cyberattacks are on the rise, and finding a way to store contracts securely should be a priority for every business type. Many businesses don’t know how to protect themselves and their sensitive documents, but you don’t need to be an expert on cybersecurity to do so. Using a contract lifecycle management tool allows you to keep all your contracts in one place, thus keeping them more secure. When you have contracts stored all over the place and are sending them via email attachments, you’re putting your documents at risk of falling into the wrong hands.
2 No standardization
Businesses often struggle with creating standardization across all of their contracts. Standardization is essential to keeping contracts streamlined and organized. When contracts are changing hands frequently or being created by different staff members, they can often end up in strange formats. Using uniform formats for all your contracts will enable you to find exactly what you need, when you need it and ensure you don’t miss anything when creating new contracts. Using contract management software is the best way to standardize your processes.
3 Inability to track the status of contracts
A huge struggle, especially for larger businesses and companies, is the inability to track contracts’ status. When sending out large amounts of contracts regularly, it’s nearly impossible to keep track of which ones need signing, which need amending, and which need renewing. You need to have an organized process where you can manage contracts throughout their lifecycle and always know exactly which stage each is at. Software tools will let you know precisely where each contract is at and what actions you need to take.
4 Compliance issues
Since contracts are legal documents, many businesses struggle with maintaining compliance. When a company drafts a contract, they usually need to have it approved before actually sending it out. Not having a proper method to do this can lead to confusion. Sending back and forth emails, calls or texts to discuss contracts and approval end up making for a lot of extra work down the line. If the company needs to do a compliance audit for how a specific contract was approved, they will have difficulty figuring it out. An approval workflow via contract management software ensures that all contracts are fully compliant, and the approval process is transparent and defined. It will provide a set of rules around approval, meaning contracts cannot pass if they have any compliance issues. On top of that, there is a full log of the contract. That includes all changes, approvals, and what actions were taken by whom.