In previous posts, we’ve talked about how contracts are an important part of administering your business operations and how contract management software is a leading tool to help you stay organized. Maybe that’s why you are investigating – or have even already purchased – contract management software.
Implementing a solution, however, isn’t just about importing contracts to have electronic copies and then maybe setting a few alarms to remind you of key dates. To proactively reduce risk and business liability, and maximize operational efficiency and profitability, you need to practice effective contract administration – the ongoing governance of each contract.
Depending on your industry, document and record retention can be vital – if not required by law – for your company to do business.
Due to required document retention policies in the Sarbanes-Oxley Act to the Health Insurance Portability and Accountability Act (HIPAA) and the Fair and Accurate Credit Transactions Act (FACTA), document management and retention has risen to a high priority among CIOs and others.
Consider the need to retain agreements to meet legal requirements when contracting to local, state or federal entities. As a post on the website Government Video points out, “…when you do business with the government, you are under a duty to retain contract, cost, and pricing records for a certain period of time, generally three years from the date of final payment… For certain records, the period runs from the end of the fiscal year in which the cost was incurred, so that the actual retention period could last even longer.”
Merriam-Webster Dictionary defines a contract as:
- a binding agreement between two or more persons or parties
- a business arrangement for the supply of goods or services at a fixed price
The complexity of different contracts can differ hugely depending on the size of your business, your industry, etc. But increasingly complex contracts can quickly creep into your business as your growth scales with success.
While it might be suitable to manually manage a few contracts as you get started, it is a job that can reach an overwhelming level almost overnight without the right tools in place.
With a contract management system in place, you can track, search, and even report on conversations that potentially affect contracts and terms. Wouldn’t it be a real game-changer to simply open your contract management software and have all the crucial data at your fingertips before you renegotiate a contract?
In today’s digital age, it is practically unacceptable to continue keeping important contracts and documents stored solely in file cabinets, desk drawers, and bankers boxes in some off-site storage center. Relying upon a single paper copy of these documents raises a significant amount of risk in your business operations. But with a contract management system, you can retain electronic copies for convenient access while safely keeping the original hardcopies with your other critical paperwork.
Properly managing contracts serves two purposes: doing so protects your business from the risks and litigation associated with contract breaches, and also opens up a unique opportunity to boost profitability. Want a little more in-depth information on the benefits of contract management? See our exclusive white paper: How Contract Management Software Reduces Risk.