Many business owners believe that contract management systems are only for lawyers and accountants. This couldn’t be more wrong. Contract management systems have never been more important, with everyday business processes transitioning to digital. You need a good CMS to handle your contracts, and keep running your business smoothly.
Don’t think of a contract management system as a glorified filing cabinet. Holding documents is only a small part of what they can do. A CMS manages the entire contract lifestyle, from first draft all the way through to closure. Sending a client a contract can be a complex and in some cases very tedious process, and you need a system that guides you and your client through it efficiently.
When you’re looking for a contract management system, remember that they all should abide by these four pillars:
But a really good system will go far beyond just meeting these criteria. Systems should be built with the end user in mind, streamlining certain processes and offering features that will help users build profiles that work for them. When you’re looking for a contract management system, look for these three things:
- A Robust, Cloud-Based Central Repository
Cloud-based is a must. Being able to access and work with your contracts on the fly, wherever you are, is a necessity in today’s world. In addition, you need to be able to give employees and clients access to up to date files remotely. It’s also extremely difficult to compile records for an audit when your system is decentralized.
But simply being cloud-based is not enough. It’s the bare minimum. What you need is a repository that’s smartly designed, and offers the right search and notification features.
As a general rule, if you’re trying to find an obscure contract from months ago, the fewer clicks it takes to get to it, the better. Complexities will only add to the amount of time you spend working your way through it — time you’d rather devote to something else. You should be able to conduct a full text search through all of your documents to find specific terms or clauses, in addition to regular date and title name search functions. You should also have ability to track contracts by future expiry date.
For customization, organizing your documents into custom folders will also be very important, with each of those folders being given permission guidelines you set.
2. Powerful Audit Trail Functionality
Going paperless with your contracts can be a double edged sword. You simultaneously have the ability to track how a document has evolved to a much more detailed degree than before, while also being at mercy to how complex that evolution can become. With digital documents that can be edited much more frequently and easily than their physical counterparts, keeping track of different versions can become a huge problem.
A system that ensures the right version of an agreement is shown to an auditor — and all the changes its been through — is necessary. Simply knowing when your contract was sent out and signed won’t be enough. You will need a system capable of tracking every edit to a draft, attaching a time stamp and author to each one.
The most approachable way a system can track your document edits is by presenting them visually through a linear progression. Starting with the drafting of the very first version, the system should draw a direct roadmap of a document’s journey. Every time it’s edited, sent to a client, viewed, signed, or rejected should be shown, with the ability to call up any version along the chain.
3. A Great Template Library
In many cases you will want to import your own contracts to your contract management system, but there may be times where you will not have a template of your own to draw upon. Drafting contracts can be incredibly time consuming, so having a robust library of contract templates to use can save you a significant amount of time and effort.
Like a good cloud repository, an effective contract management platform will offer an array of customization options with its template library. Being able to upload a contract to be used as a template in the future is a must, along with the ability to create custom folders to keep track of your templates.
If you’re looking for a contract management system that goes a step further in this regard, ContractClub offers a template library built off of user contributions. It has both a robust public library of contract templates, and a user-driven marketplace where you can buy and sell contracts to others.