Contract chaos? We see it all the time.

In the early days of a company’s journey, managing contracts is relatively straightforward, often handled by a single person.

However, as the company grows, keeping track of contracts without a proper system or process becomes increasingly challenging. This operational debt can lead to unexpected charges, overlooked contract renewals or even legal issues. 

While some companies address the increasing complexity by expanding their operations teams and hiring dedicated contract managers, not all businesses have the luxury of such resources.

The good news is that there are some highly actionable steps any business operator can take to significantly strengthen the contract management processes and increase the visibility into a company’s contract portfolio: here are six of them.

1. Centralize the agreements

The first step in improving contract management is to centralize all your agreements.

Contracts are often scattered across various departments and stored in multiple locations—physical files, personal desktops, email attachments, or different folders across your cloud storage. 

By consolidating all contracts into a single, centralized repository, you can streamline access and ensure that every team member can find what they need quickly and efficiently.

To execute this step effectively, think about two things: what are the different types of agreements existing within your organization, and who is responsible for them - that will ensure you do not miss any meaningful category of commercial agreements, and involve other stakeholders across the company.

2. Create a system

Once you have all of the contracts in one place, you can further increase their accessibility by organizing them in a systematic way by dividing them into different categories.

Some of those categories may include customer contracts, vendor agreements, employment documents, financial deals, and partnership arrangements, among other things.

Once you have a good sense of different categories across the business, consider adding an extra layer of organization by using sub-categories. 

For example, for customer contracts, you can either divide them by customer to easily access all documents related to each counterparty, or instead divide them by contract type (e.g. NDAs, master services agreements, statements of work) to easily access a portfolio of specific types of customer contracts.

Effectively dividing the contracts into broader categories will also enable you to better manage access to contracts across the organization on a need-to-know basis.

3. Collect the key data

To increase visibility into the entire contract portfolio, you may also want to collect the key data from the agreements into one place that’s easily accessible and allows you to keep an eye on the contracts without having to re-open them each time to check some details.

A simple spreadsheet can go a long way. Focus on collecting actionable data such as parties to the agreement, key dates, contract value, payment terms, billing frequency, renewal terms and any performance clauses relevant to your business.

This information will help you quickly identify contracts in need of your attention.

4. Prioritize the most important contracts

Not all contracts are of equal importance - a good idea is to assign tiers of importance or priority to all of your agreements ensuring you can easily filter them down to those that you should keep a particularly close eye on.

As you assign different tiers, consider the following, among other things:

• Contract value: prioritize the largest contracts given their financial impact;

• Key dates: highlight contracts that are coming up for renewal or expiration in the next month or within the quarter;

• Potential for regulatory consequences: identify agreements that have risk management implications beyond just financial impact;

• Historical performance and past issues: keep an eye on contracts that have presented challenges in the past and approach them proactively.

Prioritization will help you effectively adopt the 80/20 approach to ensuring key contracts are always acted on while minimizing the time managing them.

5. Assign responsibilities

As your organization grows, so does the number of people signing contracts on behalf of your organization: perhaps it’s the revenue operations team purchasing a CRM, or the engineering team upgrading their cloud platform. Even if all contracts go through a single person at your company, they may not necessarily be the relationship owners or have the full context.

In that case, it’s important to assign the responsibility for contract management to contract owners, and ensure that they know the process for contracting within your organization.

You may want to add key date reminders to the calendars of all responsible parties to ensure timely action and business need consideration when it comes to contract renewals or any other milestones.

6. Have a plan for periodic review

Finally, contracts are not static documents; they require periodic review to ensure continued compliance and relevance.

Implement a plan for regular contract reviews, which can include checking for upcoming renewals, evaluating performance against contractual obligations, and assessing any changes in business needs or legal requirements. Regular reviews help identify potential issues early and enable timely adjustments.

While implementing these steps may take some effort and time, they are inevitably going to significantly strengthen your team’s ability to stay on top of key contracts and contractual obligations, streamline contracting processes, and help avoid unexpected surprises.

Take a step further with contract management software

For companies looking to take their contract management to the next level and automating all of the above, implementing contract management software like Exante can be a game-changer. 

Here are some key benefits:

• Ease of use: instead of setting up these document systems and spreadsheets yourself, benefit from Exante’s user-friendly interface and purpose-built functionality straight out of the box.
  
  

• AI-powered features: eliminate the manual work and administrative hassle from contract management with Exante’s AI-powered contract data extraction and chatbot assistant.
  
  

• Increased visibility & searchability: Exante’s contract dashboard allows you to quickly filter & find relevant documents across the entire contract portfolio, while our powerful search engine catches the text even in scanned legacy documents.
  
  

• Legal clause identification: in addition to key contract data, Exante platform also scans each agreement for the existence of various legal clauses (or lack thereof) enabling users to quickly find agreements with insurance requirements, termination for convenience or auto-renewal clauses, and so on.
  
  

• Alerts & reminders: with Exante, you can forget having to frequently check your spreadsheet with contract data; our platform will alert you to the contracts in need of your attention so that you can focus on other things in the meantime.
  
  

• Security & access management: centralizing your agreements in one end-to-end encrypted and secure platform ensures that your key business information is safe and secure, while access management functionality allows you to configure the repository in a way that grants access to users on a need-to-know basis.

Ready to see what Exante could do for your organization? Get in touch today, and let’s explore it together.