Contracts are prone to risks, and as your business grows, you are faced with many contracts and the associated risks. However, one can prevent potential pitfalls by implementing a contract management platform.
Here are 8 ways to mitigate risks with contract management software:
1. Use Standard Template Repository
A common reason for contractual risk is noncompliance, generated by incorrect language usage in the contracts. By creating a standard template repository, Contract Management Software helps you store all the key clauses and latest templates in one single platform. The standard templates help legal and non-legal teams self-serve contracts, ensuring they use correct language pre-approved by general counsels. It helps to mitigate the risks of inconsistent language in the contract. A contract management software also helps you add the cmpany's business rules in the templates under some circumstances, like adding a data protection clause for a specific contract.
2. Track Contract Versions
Executing a contract is a collaborative process. Multiple teams collaborate to review, negotiate, edit, and make changes in the contract. Hence, it is vital to track each change and contract version to avoid missing important contract data. A contract management software helps users track changes [1] and compare two different versions of the same contract on a single platform. It enables you to avoid duplicity, spot inefficiencies, and retrieve essential data back into the contract.
3. Optimize Role-Based Access Control
A common concern with contracts is that they will be misappropriated, which can occur internally or by external parties and competitors. You can prevent it by giving each team member role-based internal and external access. Role-based access helps you mitigate the security risk of having confidential and proprietary information leak from your organization. You can decide who can edit, view, or comment on the contract using contract management software. It ensures that only necessary employees can read or write certain contracts.
4. Encrypt Contract Data
Another way to protect your contract from unauthorized access is to encrypt all the information. Contract management software encrypts information at rest and in transit using the latest encryption standards. Here data at rest refers to any data stored within the contract management software. Data in transit is data in motion sent between external parties and the contract management system.
5. Automate Contract Workflows
Automating contract workflows help streamline the contract lifecycle and boost the legal team's productivity. Contract management software mitigates contractual risks associated with missed deadlines and approvals. It also helps in contract audits and analysing a contract's performance. With contract automation, even the non-legal teams such as sales reps or HR can self-serve the contracts.
5. Centralize Contract Storage
A cloud-based contract management platform provides a virtual repository for easy and secure accessibility of contracts. Team members can easily collaborate, edit, review, approve, and store contracts securely and centrally in the contract management platform providing complete transparency into the contract lifecycle. The centralized contract storage helps you to access a particular contract quickly when required. It hence becomes easy to track and monitor the status and performance of each contract.
6. Send Alerts and Notifications
Missing contract deadlines, obligations, and renewals can cause financial losses to your organization. A contract management platform can easily prevent these. By setting automated alerts, tasks, and calendar reminders linked to the contract data, you can stay on top of critical contract milestones. The alerts and notifications also help fast-track the contract approvals. You can easily send an alert to the signatories reminding them to sign the contract as feasible. Additionally, automated alerts help plan future audit trials.
7. Secure Approvals
Securing approvals via E-signatures gets the contracts signed faster. Also, e-signatures safeguard the confidentiality of the signature and store it over the blockchain. It records details about who, when, and where a contract is signed to ensure authentication and help with audit trials. They prohibit the forgery of contract approvals and the possibility of misplacing a hard copy of a contract. Furthermore, it enhances the signatories' experience by enabling them to sign the document anytime and anywhere at their convenience.
Wrapping up:
Good contract management practices help mitigate risks protecting your business from getting into serious legal trouble. Contract workflow management platforms like InkPaper streamline the entire contract lifecycle, minimize the risks, and boost productivity.
With InkPaper's contract workflow management platform, you can manage multiple contracts easily and do more work in less time.
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