Businesses run on contracts. As your business grows, so does the volume of contracts. It is more difficult to manage and monitor hundreds and thousands of complex contracts when they are dispersed across multiple locations, especially when multiple teams are involved, like the contract managers, legal counsels, procurement managers, and sales reps.
Enters contract tracking to enable teams to easily locate and monitor where a contract is within the contract lifecycle. Contract tracking helps you stay organized and also increases your business's productivity. By knowing the status of each of your contracts, you can streamline the approval process and close more deals faster.
Why is Contract Tracking Important?
Businesses usually store contracts over shared drives, track the progress through spreadsheets, and use emails to manage negotiations and renewals. As contracts are dispersed over multiple locations, the biggest challenge is visibility.
When a contract is first drafted by a legal team or a sales rep, it is created with a particular outcome - either a closed deal, employee onboarding, or an agreed partnership. But with no visibility into the process, it gets difficult to know the progress delaying the outcome.
Without contract tracking, it is difficult to know how contracts progress, leading to various inefficiencies.
Consequences of Poor Contract Tracking Processes:
1. Delays in the Sales Cycle: Sales deals are guarded by contract agreements, and a successful sales cycle depends upon the execution of contracts. Without proper contract tracking, various teams involved in the contractual processes may not know who is currently working on it. This leads to avoidable delays in the sales cycle, affecting a company's revenue.
2. Conflicts Between Teams: The lack of effective communication and visibility in contract tracking processes increases the chances of errors, such as transferring the wrong file or a wrong update. This can cause potential conflicts between the legal and the business teams.
3. Contractual Risks: By failing to monitor contracts effectively during contract reviews and negotiations, non-standard terms could slip through into the contract, resulting in significant risk for the business.
4. Loss of Contracts: If the contracts are not monitored post-execution, it may get difficult to locate them. Without a proper database, companies can struggle to manage contract renewals, risks, and revenue.
An effective contract tracking process gives you complete transparency into the contract lifecycle. It helps you identify if the contract is stuck and what needs to be done to move it forward.
Tips for Effective Contract Tracking
Here are some valuable tips on how you can track and monitor your contracts well:
1. Identify the Location of Your Contracts
While dealing with contracts, you should know where all your contracts are located. Without knowing the location of your contracts, accessing and tracking them is difficult. Establish a system and create a repository so you can quickly find all the agreements when required.
2. Document Important Data of the Contracts
Every time a new contract is executed, consider documenting every piece of essential data that needs to be monitored. Collaborate with legal teams or contract owners to determine any special considerations to track apart from renewal dates and deadlines.
3. Keep the Stakeholders in the Communication Loop
Contracts are a collaborative process. You need to ensure all the stakeholders are well informed about the status of the contracts. Keeping them informed of the approaching deadlines and deliverables will help you plan ahead of time for contract renewals. It is equally important to inform the stakeholders of the contract's performance. Whether it is performing as expected, if not, you can collaborate and review the contract and make any changes if required.
4. Streamline it With a Contract Workflow Platform
Contract tracking and monitoring become much easy to streamline with the help of a contract workflow management platform. Here are key features of a contract workflow platform that helps in simplifying contract tracking:
● Centralized Database: A contract workflow platform ensures easy and secure accessibility of contracts. With centralized storage, you can easily access a particular contract anytime from anywhere with an internet-enabled device. A secure central database is also helpful for future audit trials, contract renewal reminders, and monitoring the performance of old contracts.
● Real-time Collaboration: With real-time collaboration, you can review, edit, mention, share, and approve contracts all in a single space seamlessly. A contract workflow platform tracks all the changes made so you can compare two versions of the same contract effortlessly. It saves valuable time and safeguards your business from contractual risks.
● Role-based Access: A contract workflow platform gives you complete control over who can access the contract. You decide who can only view the contract, who can edit, and who can approve. The role-based access ensures visibility and accountability for each team member.
● Notifications and Alerts: Contract workflow platforms allow you to notify and send alerts to various signatories, reminding them to review or approve a contract. It improves transparency and makes contract tracking easier for all the parties involved.
● Seamless Integrations: Contract workflow platforms enable you to integrate with external systems to share and track contracts easily. Setting up such integrations helps make contract tracking visible for everyone apart from those involved in the contracting process.
Ready to Get Started?
A contract workflow platform like InkPaper streamlines contract tracking for your business. InkPaper accelerates the entire contract lifecycle for you to close more deals faster.
