Everyone absolutely loves the end of the year, right? After all, holiday songs play non-stop on the radio. With our non-existent free time, we sprint through stores and stand in line to purchase gifts we neglected to order online by the final shipping date. There are turkeys to cook and parties to attend. And with a little luck, you can run into a visiting in-law as you both approach the bathroom in the middle of the night. Plus, just to keep it interesting, at work there are year-end reports to run, quotas to meet, and customers screaming that their accounts must be handled by the end of the year.
So, since you’re already juggling so many other year-end obligations, we thought it would be a perfect time to help out by providing an end-of-year to-do list with some housekeeping suggestions for your contract management process.
Assess Your Contract Management Process
The first question is whether you have brought your contract management into the 21st century. While this sounds like an obvious question, the International Association for Contract & Commercial Management (IACCM) reports that a whopping 85 percent of companies still use manual contract management processes with at least some of their contracts. Are you still using shared drives? Excel sheets? Storing everything in email?
The article further reports that businesses employing at least 1000 people lose $2.5 to $3.5 million every year searching for and recreating lost documents. The failure to use a tool or system can get expensive!
Digitize and Take Advantage of Contract Management Software
If your company still relies on manual processes, take immediate steps to leverage technology by adopting contract management software. At the core of the contract management process should be digitization of all of the company’s contracts and storage in a centralized repository.
The IACCM article cited above notes that such a digital transformation can improve profitability by up to 9 percent. By mitigating document loss and taking advantage of the search, tracking, and sharing capabilities of a cloud-based repository, digitizing the contract management process reduces costs and boosts efficiency.
Make Sure All Contracts Have Been Onboarded
If you have just adopted contract management software, it’s crucial to make sure all contracts are onboarded. ContractSafe’s OCR technology makes storage a snap and searching for key parties or clauses as easy as a Google search.
If you already have a system in place, use the end of the year as a time to make sure no paper contracts have slipped through the cracks. If so, get them uploaded, pronto!
Exercise Sound Risk Management Throughout the Contracting Process
The company’s contracts play a large role in managing the enterprise’s risks and protecting assets. In fact, many of the most frequently negotiated terms in business contracts relate to concepts of shifting liability and managing risk. We recommend adopting a standardized contracting approach to these issues.
For large companies, liability and risk management should be discussed with in-house counsel and/or the risk management department. Smaller companies may choose to discuss the matter with outside counsel.
ContractSafe helps by automating the contracting process, digitizing agreements, and allowing speed searches of all of the company’s contracts with Google-like Boolean searches. Contract managers can locate preferred language with the click of a button, then easily identify all contracts that don’t meet the standard.
Make Sure Automatic Contract Renewals Are Calendared
Contracts often contain automatic contract renewal clauses that require the company to act by a certain date. A failure to properly monitor these provisions can result in unintended (and expensive) contract renewals.
On the other hand, a desired contract may require that a renewal be communicated to the other party by a certain date. A company can lose a valuable right by failing to renew.
If you’ve just adopted contract management software, the end of the year is a good time make sure that all of these important dates are calendared. With ContractSafe, management can perform an instantaneous search and identify such clauses. The ContractSafe contract management system then tracks all key dates and sends reminder emails to whomever you choose. The system also maintains a calendar of key dates which can be checked at any time.
Audit for Compliance
Today’s contracts have become more complicated than ever. They contain benchmarking clauses and other tools for measurement, and often require parties to provide money or other acts of performance by certain dates. Thus, it’s imperative to ensure you are being paid as agreed and that you are receiving the level of service or product for which you contracted. Or that you are delivering on your obligations!
It’s equally important that the company does not pay for services or products it is not receiving. We’ve seen plenty of cases in which a company continues to pay after the contract has ended. Similarly, we know of cases where a company loses a contract and thus does not realize it is not being paid. ContractSafe eliminates these issues by storing all contracts in one place and tracking all key dates.By now, it’s probably obvious that in the world of contract management, ContractSafe truly can make your year-end a joyous one. With amazing features that are easy to use, you can use your extra time to deal with all those other end-of-year issues. Start your free trial today!