Contracts management - overcoming the challenges - new contracts

Is it easy to see which is the latest draft of a contract?
I recall a situation where an export director went to a meeting for contract negotiations. Unfortunately, some revisions to the contract discussed by his colleagues were still sitting on someone’s desk because there wasn’t a system for updating the draft contract in a central place that everyone could access. The result was a worse deal on the day: not good for the atmosphere at the next board meeting.
Contracts Management

Too often, paper files are held in individuals’ offices or departments instead of a central file. Even where electronic copies are held, without central storage and version control tools it’s extremely difficult to keep track of things in an efficient way.

Having central access to all contributory papers - including all email exchanges and attachments - is essential where a number of parties are working on the same project negotiation. It’s also vital that there is a system for version control so that everyone can see what changes were made, when and by whom.

>> Electronic document management, central contract draft storage and version control tools are essential. This is how those ‘small’ changes to contracts that cost you dear if they are not spotted can be picked up. These tools also ensure an audit trail is in place if it’s needed later on.

Do you rely on spreadsheets too much?
Spreadsheets are fine for small businesses maybe, but pretty soon their limitations are exposed. They rely on spreadsheet owners keeping them up to date and people around the business feeding in relevant information.

Spreadsheets also either need to be distributed regularly or stored on a central server, and either way things get messy if multiple people are updating them - especially if they are not regular Excel users.

>> It isn’t easy to keep spreadsheets maintained with accurate information: this is too big a risk when numerous contracts and large sums of money are involved.

Is there a failsafe system for checking with the legal people?
In this increasingly litigious world, the basis for most agreements will be a contract, so each side’s interests are protected. But in reality are they? How often have the relevant legal or compliance people (internal or external) got involved in contracts later than should have been the case, or worse still, not at all?

There should be no excuse for missing legal intervention at the right stages, but without a system and tools in place this is often what happens.

>> The legal process may be a pain, but it is essential and attention to detail is what matters in court should supplier relationships go wrong. 

Part 3 > Maintaining contracts