In the old days, managing contracts meant wrestling with stacks of pen-and-ink agreements. Even today, when we’ve mostly moved past paper, companies still struggle to find contracts scattered across many different digital locations.
This article aims to help you solve that mess. We’ll dive into what a modern contract repository is, why it’s a game-changer for your contract lifecycle management, and how to set one up effectively. Let’s get started.
What is a contract repository?
A contract repository is a centralized location for storing, managing, and accessing contracts. But modern contract repositories offer more than just a storage solution. It serves as a hub that streamlines the entire contract management process.
From drafting and negotiation to execution and renewal, a digital contract repository ensures that every step is efficient, transparent, and compliant.
Traditional vs. digital contract repositories
In the past, most organizations stored contracts as physical pieces of paper, organized in cardboard boxes and metal filing cabinets. But these traditional contract repositories had a number of frustrating drawbacks. For example:
- Contracts were hard to find. Tracking down any specific agreement involved days or weeks of digging through boxes and cabinets, trying to navigate outdated filing systems.
- Documents often got lost or damaged. Paper contracts could easily be ripped or smudged, or lose staples and pages. In many cases, entire contracts were misplaced altogether.
- Storage consumed space and money. Boxes and folders full of paper documents often filled entire rooms, which could’ve been put to better use. The cost of all this storage space was significant, too.
- Security was hard to enforce. Anyone able to get into a room or cabinet could access every document stored there. There was no way to prove who’d accessed a document, or when.
Many companies tried to solve these problems by converting their contracts to electronic documents – only to encounter the same frustrations in the digital world! Electronic contracts can still be hard to find, and tend to get lost in the depths of shared drives and email threads. Digital storage space can still be costly, and network security can be hard to enforce.
Enter the contract repository – a solution that puts these problems to bed once and for all. By bringing all their digital contracts together in one centralized online contract database, companies are making agreements easy to find, impossible to lose, affordable to store, and secure from unauthorized access.
The role and purpose of a digital contract repository
A central contract repository serves multiple purposes:
- Centralized contract storage: A contract repository helps you keep all your existing contracts in one place, where they’re easy to access and open with just a few clicks.
- Enhanced security: A repository safeguards your digital contracts with state-of-the-art security measures such as single sign-on (SSO) and multi-factor authentication (MFA).
- Simplified search: In your repository, you can use tags and folders to find any contract document you need in no time. Full-text search and optical character recognition (OCR) enable you to run searches on all text in a document, even if it’s been scanned in from a paper printout.
- Streamlined contracting processes: Automated tools help you manage each contract’s entire lifecycle, from inception to renewal or termination.
Why is a digital contract repository important?
A digital contract repository is important because it reduces contractual risk, increases efficiency, improves contract visibility, and saves time and money. Here’s a detailed breakdown of each of these benefits.
- Reduced risk: Helps improve contract compliance, and adherence to legal requirements for electronic signatures and data storage.
- Increased efficiency: Speeds up contracting processes by providing quick access to contracts and contract data.
- Improved visibility: Offers insights into your contract portfolio, aiding in better decision-making.
- Saved time and money: Automates many aspects of cloud contract management, reducing overhead costs.
For example, since our client Yates Construction centralized all their agreements in Concord’s contract repository, they can now find any contract in just a few seconds, rather than having to search for hours on end. Multiplied across 5,000 employees and 15 regional divisions, “that adds up to thousands of dollars every month in saved labor hours,” says Jenny McMullen, Corporate Contract Administrator at Yates.
And making the switch is easier than you might expect.
How to create a digital contract repository
To create your own digital contract repository, just follow these five steps:
- Collect and digitize all existing contracts. Collect all contracts scattered across different departments, and convert them into digital documents.
- Choose the right contract management software. Make sure you choose a platform that enables you to organize contracts using tags and digital folders.
- Organize contracts using folders and tags. Create a folder structure based on type, department, or project and use tags for easier searching.
- Set up user access and permissions. Define who can view, edit, or approve contracts. You may also want to set folder-specific or team-specific permissions.
- Train your team. Make sure everyone in your organization knows how to use the new repository effectively, and follows consistent practices for naming and tagging documents.
Contract repository management best practices and examples
Here’s a quick list of best practices for getting the most out of your contract repository, along with examples of each.
- Implement version control. Use a version control system within your contract repository to track changes made to contracts over time. And whenever a contract is updated or amended, save it as a new version rather than overwriting the existing file. This allows you to easily revert to previous versions if needed and provides an audit trail of changes.
- Set automated alerts and reminders. Create automated alerts for key contract milestones such as renewal dates, compliance checks, or payment deadlines. For example, configure your contract management software to send automated email reminders 30, 60, or 90 days before an agreement’s end date, so you can follow contract renewal best practices.
- Use full-text search and optical character recognition (OCR). Leverage advanced search functionalities to quickly locate contracts based on various parameters like contract type, vendor name, or expiration date, anywhere in their text. Add tags to contracts when you import them, for even more efficient sorting and searching.
- Set up contract approval workflows. Create approval workflows that automatically route each contract draft to key stakeholders. For example, you might route new contracts to the legal team first, followed by the finance department, and finally to the executive team for approval.
- Integrate with other software tools. Connect your contract repository to other systems like your CRM, ERP, or accounting software for a seamless flow of data. For example, you might integrate your contract repository with your CRM system so that customer contracts are automatically updated when changes are made to customer data.
As you can see, a central contract repository is not just a storage space but a dynamic tool that streamlines the entire contract lifecycle management process. It offers centralized storage, enhanced security, and simplified search capabilities.
What’s more, a digital repository plays a vital role in reducing risk, increasing efficiency, and improving visibility into your contract portfolio. For all these reasons and more, a well-managed contract repository is not just an option – it’s a necessity.