According to a report by Gartner, contract lifecycle management (CLM) is “evolving from an operational record-keeping system . . . to an enterprise-level core system addressing business risk, costs, and the pursuit of revenue maximization.” As the market has continued to expand, there have been numerous software solutions offered, but not all are equal in terms of price, features, and usability. Concord will here outline what features good contract management software should come with.
Contract management is a term denoting several sub-facets. The various parts of contract management can be broken down into three phases: 1) contract drafting, 2) contract negotiating, and 3) post-execution management. In this article, Concord takes a closer look at what some of the best practices and necessary features are for contract management in the digital age.
Contracts should always be reviewed, preferably by legal counsel, before they are signed and put into effect. This is done not only in both phase 1 (contract drafting) of the contract lifecycle and phase 3 (contract management). They should be reviewed periodically in phase 3 as renewals are considered and as relationships continue to evolve post-execution. When looking for good contract management software for facilitating contract reviewing, look for features that:
- Allow document changes to be tracked in real-time, with changes made by different individuals signified by different colored font.
- Auto-generates and stores new versions of contracts, with previous versions available at with a single click.
- Allow document tasks to be delegated into a workflow system that notifies individuals automatically when action is needed.
If businesses already have contract management software, and teams are still being required to track changes in Microsoft Word, and email documents back and forth, it is time to consider upgrading the solution. Often times, an “upgrade” does not necessarily mean a higher price tag than the status quo.
Contracts often evolve and are updated over time with amendments rather than drafting a completely new agreement. It is crucial to be able to track the relationships between documents and their amendments throughout the contract lifecycle.
When a contract is updated, contract managers need to be able to view things like change orders, amendments, and framework agreements quickly, preferably in a digital format with a single mouse click. Good software will keep allow for amendments to be attached right to the contract they’re a part of.
Managing Contract Clauses
Clauses are actionable items that are scheduled to take place after the contract terms have been agreed to. Clauses set out, in a clear way, the obligations, privileges, and duties of each respective party. Contract management software will allow for contract clauses to be viewed in just a few clicks, and the terms followed up with with minimal hassle.
Contract Financial Condition Tracking
Once a contract has been signed, executed, and is in effect, there are often financial terms and conditions that accompany it. Look for software that offers the ability to add financial conditions, amounts, and reminders directly to the contract’s summary sheet.
Sending Follow Ups and Reminders
Sending follow ups through an automated reminder system is a simple but powerful tool for ensuring that deadlines and opportunities are not missed. Good software will send an email at a time of your choosing to remind parties of an event related to the contract’s lifecycle requiring action.
In today’s dynamic workplace, it is important to keep on top of applicable regulations for your industry for document storage, as well as have a means of keeping documents organized as new customers are brought on. Keeping documents in a digital format has been practiced for decades, but it is now becoming industry standard to keep documents stored electronically.
Storing contracts electronically prevents them from being lost or stolen, and makes locating them much faster and simpler, also allowing for the creation of workflows between individuals and teams without physical paper. Additionally, storing documents in a digital format eliminates much of the expense surrounding keeping paper documents.
Concord is a cloud-based contract management platform that’s changing the way the world is creating, negotiating, signing and managing contracts. The platform is being used today by more than 40,000 companies in 130 countries, and tens of thousands of users who are now managing all of their contracts on Concord. Additional information can be found at http://www.concordnow.com/.