Because many different people and departments need to be involved throughout the contract management process, there are many places where communication can break. If two companies wish to do business with each other, a contract defines the activities of the two organizations and defines the conditions under which they meet each of their parties. Contracts have a strong impact on business profitability, with revenue and expenses highlighted. Many companies still think that a bottom desk drawer — or a computer desk — is considered a contract storage solution. In reality, it is a problem. Contracts are hard to find, easy to forget and risk getting lost if people change offices or leave the company. Recording contracts on a central server at least means that anyone can access them if they need them, but it`s still not a useful system for conducting audits or simply checking over-spending. Contract analysis must be carried out manually, with the potential for human error. Printing and sending a contract for the other party to sign can take days, and emails are not much faster - especially if there are several parties that are subject to printing, signing, scanning, adding and sending. There is no risk-free contract, but it is the unforeseen risks that cause the most headaches. It takes time (and impossible) to plan for all possible contingencies, but good contract management requires strong risk identification and planning systems.
With the organized contracts are building a template contract library and standard Legal Playbooks simple next steps. Regular verifications help ensure that the element`s language remains relevant, and contract management software facilitates this process by comparing contracts with standard law books. Good contract management occurs when everything flows over the entire lifecycle of the contract. It may be useful to think of a relay race - each game must finish its game, then pass the relay (or, in this case, the contract) to the next game as quickly and smoothly as possible.