Contract management is an inherently risky process. When dealing with large amounts of highly sensitive data and confidential information on a regular basis, it’s critical to have certain instruments in place to help aid in risk management. Contracts are legally bound, so small errors can lead to large repercussions for your business and your business’s reputation is risk isn’t managed carefully.
Contracts themselves carry a lot of weight, and they aren’t able to mitigate any risks that your business might face. By leveraging several tools to help reduce contractual risk, you can ensure that your contract management operations are effective, productive, and compliant.
Today’s technological advancements have truly revolutionized both contract management and risk management. Contract management software is now designed to include ways to reduce vulnerabilities that your business might face. Modern contract lifecycle management solutions make managing and overseeing all stages of a contract’s lifecycle both efficient and transparent.
Let’s discuss specific tools we recommend for reducing contractual risk.
An Organized Electronic Storage System
Without knowing where your contracts, agreements, and other important documents are located, you seriously run the risk of losing contracts and creating confusion and miscommunication regarding the content contained inside these various documents. It’s crazy to think that most companies are unable to find more than 10% of their contracts. This illustrates just how common it is – even within larger companies – to not have a proper organization system for storing all contract-related data and essential information.
A centralized contract repository can help your business efficiently store and manage any information and contract-related data so that finding every detail is easy to access. Now, you don’t have to worry about losing even 1% of your contracts. With a centralized contract repository, electronic data storage is streamlined so you can build a library with functions that are customized to your business needs.
In this way, any contract, agreement, or document can be easily tracked and found during the contract’s lifecycle while the contract is active. This is key because you can refer back to the document to double-check that the actions taken are compliant and up to standard, ensuring that obligations are fulfilled. With all of these factors in mind, risk is automatically reduced.
Specified Security Features
It’s important that your business properly follows protocols and regulations so that privacy and confidentiality is managed effectively, preventing against unnecessary errors and issues. By gaining knowledge about the legal implications of contract management, you can take the right actions to reduce any risk of noncompliance. In addition, understanding contractual obligations to clients and vendors is a major key to reducing risk in the contract management process.
Leveraging the functions of various security features within your contract management software is a great way to reduce contractual risks. Our Dock 365 Contract Management System offers cloud security. In the event of a data breach, you can be prepared to handle the situation swiftly. In the cloud, you can manage and store contracts and related data in a highly secure environment. You can also send documents from the cloud safely. Our contract management solution uses encryption to protect and backup your data.
Another great security feature is access control. Contracts are highly confidential documents with accompanying requirements to maintain their privacy. With access control, you can enable or disable access to documents within your library. Use administrative permissions features to easily set access capabilities to certain people within your business.
An Advanced Contract Search Tool
Does your company regularly deal with a high volume of highly complex contracts?
Have you ever imagined the hundreds of thousands of details and distinctive clauses contained within a massive contract and clause library?
Or have you ever had trouble locating a specific piece of data within your current contract library?
With the help of a customizable search tool, you can create and save search filters to make finding any detail fast and easy. Find documents and agreements containing certain terms and characteristics so you can locate anything within your contract library. By being able to gather contracts from your library according to a search tool, you reduce contract management risk in several ways.
Mitigate risk by being fully aware of every contract lifecycle. With workflow automation, you customize the how, the when, and the who of each step within a given contract’s lifecycle. By having all of the information of a contract on hand, you can analyze the changes made to a contract and make modifications as necessary to the lifecycle.
Without such knowledge, you run the risk of contractual error which could have a largely negative impact on your business. Using automated contract lifecycle workflows are phenomenal for boosting both the transparency and the efficiency of contract lifecycles. You reduce turnaround times and contractual risk with the help of these revolutionary flows.
In every stage of a contract’s lifecycle, you can customize tasks and control every single item. Now, collaboration and handoffs are made remarkably easy with automated contract lifecycle workflows.
Enabling automated alerts, as well as other notifications and reminders, will help you stay proactive and help you mitigate against contractual risks. Contract performance tracking includes hidden and apparent risks.
For example, contracts will include several important details like deadlines and other obligations that must be followed. Otherwise, you run the risk of being penalized by failing to meet such deadlines or fulfill such obligations. Without effectively tracking contract performance you also run the risk of not finding issues the moment they occur, making the problem that much worse and your business more susceptible to additional risks and issues.
Automated alerts help you remember critical due dates and tasks, so all the small details are considered in a timely manner. In this way, you manage both the hidden and more clear-cut risks presented within contract management. These alerts are also helpful because remembering this type of information doesn’t have to fall on the shoulders of an induvial member of your team – rather, the alerts can help keep everyone in the loop. By enabling reminders and alerts for certain deadlines, you greatly reduce contractual risk, unnecessary expenses, and the risk of incurring penalties.
Today, you can start to mitigate risk by implementing the above contract risk management tools. We suggest learning how each of these tools can help with your specific business needs so you can optimize your contract lifecycle management process and have the edge over your competitors.
Are you ready to get started today? Reach out to us to learn more about our Dock 365 Contract Management System.
If you would like more information, we welcome you to schedule a free demo with us today.
Written by Lindsey Paulk
Lindsey Paulk is a Content Writer in Jacksonville, Florida that specializes in digitally communicating all-things contract management.