Contract tracking refers to the identification of where within the contract lifecycle a contract is located. Understanding which phase a contract is in within its lifecycle can help you decide which next steps to take on the contract at hand. In this manner, you can appropriately relay contract information to your teams and communicate what actions need to be taken next on a contract or group of contracts.

Contract management is an ever-evolving process, where strategy is required throughout each phase of the contract lifecycle – from the very beginning at contract intake, to the very end at expiry or renewal. Oftentimes after a contract is signed and fully executed, the contract and associated documents are stored and forgotten about, only to be searched for once an issue arises or the contract expires. For contract management success, it’s imperative that contract managers and administrators prioritize ongoing management of each agreement to ensure that deliverables and terms are followed through on. With an appropriate contract tracking method, you can do just that. 

Contract tracking proves to be a time-consuming element of business and this requires an effective and automated contract tracking software. When two organizations desires of engaging in a business activity with the other, a contract expresses the activities that are to be engaged in by both organizations and the terms by which each party will fulfil their part of the agreement. If a contract is not worded or phrased properly, it might result in the organization losing thousands of dollars.

Areas of contract tracking

A business standard contract tracking software typically focuses on the following business disciplines:

Authorization and negotiation;

Baseline Management;

Commitment Management;

Communication Management;

Contract Visibility;

Contract Compliance or governance

What are the challenges faced in Contract Management?

The legal department usually takes care of the contracts that are entered into between parties. unfortunately, when there are numerous files to be managed and that too manually, the contract management process is bound to face bottlenecks.

Also, manual contract tracking is bound to introduce errors. A lot depends on the legal team and if they are not able to catch the mistakes, then it might lead to the creation of a havoc situation for the entire firm. The common mistakes that are bound to occur are as follows: legal compliance; revenue leakage; extended sales cycle times; jeopardized customer relationships.

1. Consolidation:

Have one central repository for managing all aspects of the contract, which includes templates, clauses and exceptions. Single source of view can help in viewing, managing, updating and searching contracts for necessary and accurate information.

2. Task automation:

Have an automated manual process that helps in freeing time for lawyers to focus on more essential and special case contracts which are relevant to their expertise. Task automation helps in increasing control and reduces the number of errors and also helps in speeding up the contract cycle time.

3. Process Efficiency:

Efficiently handled process frees up more time for all involved stakeholders - like the sales, finance and legal departments and thus allows them to spend more time on those tasks that correlate to their expertise and job profile.

4. Contract Performance:

As a company, one is always expected to grow but the level of performance delivered to be remaining the same. Having an automated contract tracking software will help in providing more visibility into the contracts and also help identify the gaps and pain points, thus helping in providing the best service to your customers.

All departments, whether they are human resources, legal, or engineering, make use of contract management software as an efficient tool to shorten and automate contract work. The best Contract Management Software reduces risks and decreases the time taken to set up and confer agreements. The main benefit of such software is that it manages the whole lifecycle of an exacting contract. Buying software involves an intelligent alternative from a variety of versions meant for dissimilar types of businesses as well as professions.

There are some steps in purchasing Contract Tracking Software. This undertakes the identification of organization wants and analysis of advantages in applying the software. It is also vital to make an investigation to know the market for contract management software, counting suppliers as well as their offers. Prior to purchasing software, it is essential to check and review dissimilar contract management software packages, so as to find one that best serves the requirements of your organization. Later than determining the buying of the operations, the next step is to choose whether to get a contract management software system in-house or by an ASP (Application Service Provider). If the choice is to run the application in-house, the contract has to include services as a help-desk response. The major advantage of choosing software is that it is easy to sustain and update. Normally, a software package must possess functionality as well as supplier viability. Additionally, it must be affordable as well as easy to install and apply.