A Concise Contract Management Best Practice Guide

Managing contracts from requests to renewals can prove difficult when relying on primarily manual processes. Your organization could be sacrificing accountability, visibility, a clearly defined strategy, and actionable insights. As such, you can find yourself running into compliance issues, minimizing contract value, and encountering other setbacks. 

But it does not have to be this way. Modern advances in contract management technology can allow your organization to scale with success.

Read on to learn how to manage contracts effectively and how leading contract management software can support each of the contract management best practices below for efficient contracting processes.

What Is a Contract Management Best Practice?

A contract best practice is a critical action that is widely considered an industry standard. A good contract management best practice can help streamline an area of effective contract management that contributes to the efficiency of the contract lifecycle. As contract management and legal operations continue to transform digitally, best practices for contract management usually involve leading CLM software.

#1 - Leverage a Centralized & Secure Electronic Contract Repository

The first of our contract management best practices in contract management is to centralize contracts within a leading CLM software platform that contains highly configurable reporting features, graphical dashboards, and milestone notifications. With the help of MS Outlook and MS Word integrations, you can further streamline your contract management processes. Additionally, a CLM software provider that is SOC 1 and SOC 2 compliant virtual ensures a highly secure contract repository.

Modern contract repositories support robust search functionality. You can search through a centralized contract repository in the following ways to observe contract management best practices.

1. Intelligently search any word or phrase for comprehensive results.
2. Filter by contract metadata area (e.g. title, date, company).
3. Filter search to see results that include a search term or contain it verbatim.
4. Search for metadata fields, files, and attachments.
5. Save searches.
6. See search history.
7. Leverage "Did you mean...?" functionality in case you misspell a search.

#2 – Automate the Contract Lifecycle From Requests to Renewals

Automate contract lifecycle management (CLM) with best practices for contract management that can track each stage of the contract management process. CLM software tools can help you anticipate milestones and key dates with integrated real-time automated alerts for contractual obligations and more. Automated contract management process flow can help you focus on contract performance management by allowing more time for contract management optimization.

You can automate each of the contract lifecycle stages with leading contract management best practices.

1. Contract Requests: Leverage centralized request intake forms to quickly capture, route, and monitor request metadata fields.
2. Contract Authoring: Implement a contract management system's native document editor and connectors with mission-critical word processing applications. Automate the inclusion of preferred clauses and sections.
3. Contract Negotiations: Enjoy numbered versions and audit trails for changes made to a document. Be alerted if someone tries to modify a clause to ensure favorable language.
4. Contract Approvals: Maximize workflows, emails, and notifications to stay on top of approvals.
5. Contract Signatures: Leverage speedy electronic signatures to quickly route to signing authorities and sign contracts.
6. Contract Obligations: Utilize tasks and alerts to track tasks one-off or more holistically.
7. Contract Compliance: Use contract intelligence, visually-engaging reports, and easily-digestible dashboards to track compliance and risk.
8. Contract Renewals: Proactively be alerted to renewal candidates, leverage contract analytics, and automate workflows for renewing a contract.
   

#3 - Expedite Contract Assembly With Pre-approved Contract Language

Leading CLM software can support automated contract assembly that can streamline the contract creation process with multiple stakeholders. As per contract management best practices, you can create compliant contracts that seamlessly merge with your organization's pre-approved data fields and clauses. You can merge various document versions and templates from your pre-approved language library. As such, you can confidently and swiftly compile new contracts with trackable oversight.

With favorable contract terms and conditions and language, your organization can get the most value out of contracts and observe best practices of contract management.

#4 - Maximize Contract Tracking Oversight

Maximizing contract tracking oversight with advanced CLM software tracking tools can provide you with comprehensive audit trails and performance metrics. As such, it can help foster improved contract collaboration fruitful long-term relationships in business, and contract management best practices.

You can track the contract lifecycle with:

• task alerts.
• notifications.
• CLIN (contract line-item number) functionality that includes sub-contract flow-downs.
  

You can configure contract tracking notifications via email for comprehensive oversight. You can also easily track product or service delivery terms and payments.

#5 - Speed up Signing With Electronic Signatures

Gather signatures quickly as per contract management software best practices with leading electronic signature software. It can enable signees to sign in the office or on the go. Signees simply need the proper electronic device - including mobile - and adequate internet access.

Additionally, signees can leverage the use of digital signatures. Digital signatures can virtually ensure a signature's date of signing and that it was untampered with thereafter - so include them in your strategy per best practices of contract management.

#6 – Manage Risk With Robust Artificial Intelligence & Machine Learning

Manage and mitigate risks with robust AI and machine learning. It can help identify, anticipate, and minimize risk via a visually engaging risk assessment matrix. From there, it can learn risk-mitigating contract language for continued use.

You can also assess if an entity complies with the Office of Foreign Asset Control's national sanctions lists. As such, be sure to leverage an integrated OFAC search functionality for added oversight as a contract management best practice.

#7 - Achieve Remote Contract Management Success

Achieve remote contract management success with a web-enabled contract management suite. With it, you and your contract stakeholders can enjoy quick access from anywhere in the world with suitable WiFi. 

As abovementioned, you need to retain optimal oversight of pre-award and post-award contract management processes. You can leverage trackable contract status changes with time-zone agility. Manage remote contract management best practices, including:

• approval processes.
• contract negotiations.
• eSignatures.

Implement Each Best Practice With CobbleStone Contract Insight®

Discover how you can maximize each of the CLM best practices with CobbleStone Contract Insight CLM software. Don't waste any more time with contract management bottlenecks. Book your free demo to see CobbleStone Contract Insight in action!

CobbleStone's trusted, award-winning, fully integrated contract management system streamlines the contract management process. It helps retain optimal governance, reduced friction, and high flexibility from contract requests to renewals. 

CobbleStone Contract Insight has been a visionary leader in CLM software for over twenty years. CobbleStone is trusted by thousands of legal teams and legal departments. CobbleStone's user-friendly, robust, and scalable solution seamlessly integrates with mission-critical applications. These apps include MS Word and MS Outlook, for unified, seamless, and successful contract management.

Now that you know contract management best practices, want to learn "the other side" of things? Want to learn how to avoid contract lifecycle process failure? Watch the video below to investigate what might cause failure in contracts!

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This blog post was updated on July 26, 2024.  Its original publication date was November 23, 2021.