4 Best Practices for Tracking Contracts

Tracking contracts is a crucial part of the contract lifecycle, extending far beyond the initial execution phase. Effective contract tracking ensures that deadlines are met, obligations are fulfilled, and risks are avoided. It also provides a comprehensive history of your company’s contracts, highlighting high-risk clauses and non-standard terms. To help you maximize contract value and minimize risk, here are four (4) best practices for tracking contracts effectively:

1. Identify and Monitor Key Contract Data

Successful contract tracking starts with knowing what data to monitor and having robust systems to report this information. Key data points to track include:

· Dates: Keep track of important dates such as contract start and end dates, renewal dates, and deadlines for opt-outs.

· Renewal/Opt-Out Periods: Monitor the periods when you need to make decisions about renewing or terminating contracts.

· Obligations: Ensure that all parties meet their contractual obligations.

· Unique Terms: Be aware of any unique or non-standard terms that could impact on the contract.

· High-Risk Clauses: Identify clauses that pose a higher risk to your business and keep an eye on them.

2. Maintain Your Contract Repository

A well-organized contract repository is essential for effective contract management. This central location should store all your contracts, making them accessible to the necessary team members. To maintain your contract repository:

· Consistent Storage: Ensure each executed contract is stored properly, following a naming convention and placement guidelines.

· Permissions and Metadata: Set appropriate permissions for document access and enter related metadata to facilitate easy retrieval.

· Documented Process: Have a written process for contract storage that everyone follows. If you use a contract management solution, work with your provider to document what data is tracked and ensure that all necessary information is collected.

3. Communicate with Stakeholders

Effective communication with stakeholders is vital throughout the contract lifecycle, especially as contracts approach renewal or end dates. Keep stakeholders informed about:

· Obligations: When and how obligations are met.

· Risks: Any risks related to continuing or terminating the contract.

· Decision-Making: Deadlines for decisions and changes to contract value.

Tracking contracts efficiently from the start allows your legal team to know who the stakeholders are, when they need to be involved, and what information they require.

4. Use Workflows to Initiate Next Steps

Workflows are powerful tools for managing contract tracking. They can automate various processes, including:

· Setting Alerts: Configure alerts for upcoming renewals, expirations, deliverables, and other important dates. Include relevant information and reminders in these alerts.

· Next Steps: Workflows can identify whether a contract is up for renewal or expiration and provide stakeholders with options. Based on their choices, workflows can automate subsequent actions and notify the legal team of the required tasks.

By implementing these best practices, you can streamline your contract tracking process, ensuring that you derive maximum value from your contracts while minimizing potential risks.

Schedule a demo and find out how you can use legal software with AI technology like ALOE to create seamless workflows, improve quality assurance, and maximize your team’s potential.

 

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