Complete Contract Management Checklist

With this end-to-end contract management process checklist, evaluate your current CLM process, identify bottlenecks and eliminate them.

Select your company's growth stage
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  • Startup
  • Mid-market
  • Enterprise
  • Streamline contract management
  • Mitigate contract risks
  • Improve contract governance
  • Build better relationships

Streamline contract management

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    Create pre-approved contract templates for commonly used contract types

     

    Contract templates, while outlining standard clauses and terms, also:

    • Eliminate the need to create a contract from scratch every time.
    • Reduce the chance of human error at the time of authoring.
    • Help accelerate contract authoring while ensuring consistent language across all contracts.
    • Empower any individual with limited legal expertise to author contracts.

    Related reading:

    Customizable contract templates | 200+ clauses
    Guide to contract templates
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    Store contract templates in a single place with well-defined access control

     

    When managing contract templates across disparate systems, there is a risk that your team will accidentally use older versions. It also prolongs contract cycles due to back-and-forth emailing with Legal during reviews. A central template library eliminates these challenges while making it easy to periodically implement organization-wide policy changes.

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    Ensure contract languages are simple, clear, and concise

     

    Ambiguity in contract terms can result in undesirable outcomes. Being clear and concise with every contractual term is a valuable way to avoid disputes and secure deals.

    Contract design pattern library
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    Implement approval workflow for critical contract types

     

    Configuring approval workflows for high-impact contracts keeps stakeholders aware of potential risks and opportunities. With the fast-growing emphasis on risk mitigation, approval workflows are crucial in drafting safer contracts with better performance.

    Related reading:

    Approval workflows for safer contracts
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    Securely share contract documents with counterparties

     

    When sharing contracts with critical contract information outside your organization, it's wise to password protect the file with granular access permissions for counterparty contacts.

    Related reading:

    Negotiate faster and better with secured sharing
  •  

    Employ a certified e-signature platform to execute contracts hassle-free

     

    By eliminating the email, print, sign, and fax cycles, digital signatures empower businesses to sign contracts effortlessly from anywhere and at any time. In addition to reducing contract execution costs and turnaround times, digital signatures promote the smooth onboarding of vendors, employees, clients, and counterparties.

    Related reading:

    Execute contracts in minutes
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    Periodically check and update clause language in the templates to the latest industry standards

     

    Ensure you stay aware of new regulations or changes in your domain-related laws. Regular reviews of clause language assure compliance.

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    Create a standard clause library with legally approved language

     

    A central clause library facilitates reusability and scalability. It also simplifies introducing organization-wide policy changes when dealing with a large volume of contracts. Advanced CLM solutions with analytical capabilities also offer granular clause-based insights.

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    Implement processes that encourage collaboration with stakeholders

     

    Involving stakeholders early on helps contract authors get the right context and draft risk-proof contracts. While bringing in broader perspectives to improve the quality of a contract, peer collaboration saves substantial time lost in approval or negotiation cycles.

    Further, collaborating over any word processor that captures all changes made provides better control over contract versions and avoids confusion.

    Related reading:

    3 contract authoring tips
  •  

    Ensure the entire negotiation happens online in a browser

     

    Traditional contract negotiations are feasible with fewer contracts. But as you scale up to handle larger volumes of contracts, negotiating via multiple email threads increases costs and operational challenges. It becomes difficult to track status, locate changes, and compare contract versions.

    Online negotiation platforms eliminate those issues and promote faster negotiation cycles. They allow counterparty contacts to collaborate with peers, leave comments, and suggest changes, while enabling contract owners to track modifications. Both parties can quickly access and compare older document versions if needed.

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    Create a negotiation playbook

     

    As your team scales, one of the critical challenges is maintaining your brand's tone in all your negotiations. A negotiation playbook can provide your team with the values, tactics, and strategies needed to creatively approach challenging negotiations while adhering to the core tone. It also helps to lower dependency.

    Related reading:

    6 tips to strengthen your contract negotiation strategies
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    Measure turnaround times for approvals, negotiation, and signature

     

    Implement a digital CLM tool with analytical capabilities that identify areas of improvement in your contracting process. This helps you mitigate bottlenecks and shorten contract cycle times.

    Some of the essential metrics for evaluating your contracting process are:

    • The contract cycle time (i.e., the time taken from contract creation to contract execution).
    • The number of approval and negotiation cycles a contract undergoes.

Mitigate contract risks

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    Set automated reminders and alerts for contract renewals and extensions

     

    Though contract renewals are low-hanging fruit, many businesses miss the renewal dates. Lacking automated alerts for contract milestones is the primary reason behind missed deadlines and opportunities. These missed renewals and extensions translate to lost business opportunities and revenue.

    Related reading:

    Benefits of CLM software
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    Track and manage obligations with automated reminders

     

    One of the most critical risk-causing factors in business is unfulfilled obligations. Failing to fulfil contractual obligations can result in contract breaches that translate to revenue leakage, broken relationships, and reputational damage.

    To manage contracts effectively, you should:

    • Extract all the obligations at an individual contract level.
    • Capture their risk ratings and define deadlines for them.
    • Assign them to their respective business owners.
    • Monitor and track the status of these obligations closely.
    • Ensure the fulfilment of all duties as promised.

    Related reading:

    Fulfil all your contractual obligations on time
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    Leverage digital tools to automate document generation for post-execution stages

     

    With a comprehensive CLM solution, you can automatically generate contract letters during contract amendments, renewals, extensions, or terminations. These contract letters capture all the current changes made to a contract and its past activities. You can also configure approval and negotiation workflows for the contract letters and ensure that involved stakeholders are aware of all changes made to a contract.

    Related reading:

    Adapt quickly to changes in a business environment
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    Design and implement data protection frameworks to handle data subject requests and protect data subject rights

     

    In today's business landscape, where government regulations (GDPR, CCPA, PDPL) enforce stringent data storage and processing guidelines, developing a system to prevent data breaches and protect personally identifiable information (PII) is critical. A robust CLM solution with advanced data protection features helps quickly process data subject requests, improve compliance, and prevent data loss or breaches.

    Related reading:

    Data protection in contract management
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    Choose partners with highly-secure and reliable data servers, where data transfers are encrypted end-to-end

     

    Contracts hold critical data, so it's imperative to host them on a platform built with high security and cloud best practices. It's also essential to ensure that each data exchange is fully encrypted.

    Related reading:

    Zoho - Data Privacy

Improve contract governance

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    Store all contract documents in a central repository with advanced search and filter options

     

    A central repository for all contract documents improves visibility and accessibility. Most CLM tools come with advanced search and filter options that enable users to access critical contract information whenever needed.

    Related reading:

    Improve efficiency in all aspects of contract management
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    Maintain a complete history of all activities associated with your contracts to serve as an audit trail

     

    Recording activities at all levels (organization/user/contract/contract stage) along with the corresponding timestamps allows businesses to stay on top of all activities and conduct audits effortlessly. Granular activity tracking also improves accountability.

  •  

    Conduct periodic internal audits to improve compliance

     

    When conducting audits:

    • Establish clear objectives and plan for a comprehensive audit that includes contractual obligations.
    • Start small and complete it in batches (e.g., by contract type)
    • Audit contracts based on their performance and value realized
    • Look for redundancies in your contracting process

    Regular contract audits mitigate business risks and improve the value realized from each contract.

    Related reading:

    How to audit for contract compliance
  •  

    Develop procedures to stay abreast of upcoming regulatory changes

     

    Today, government regulations are cropping up more often than ever. To change and evolve along with them, you must be proactive in keeping tabs on all upcoming regulatory changes affecting your business and industry. It can help to involve law firms specializing in your industry in an advisory or consultant capacity and subscribe to their newsletters.

    Related reading:

    A proactive approach to regulatory change management
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    Devise a process for mass amendments

     

    When implementing organization-wide policy changes or adapting to new regulations, businesses have to amend large volumes of contracts. With traditional systems, performing an impact study and implementing all required changes is challenging and tedious. However, a comprehensive CLM solution with advanced reporting helps you quickly assess the impact of regulations across all your business deals. Automation in amendment letter generation adds to the productivity gains.

    Related reading:

    Analytics and reporting

Build better relationships

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    Implement best practices to foster long term counterparty relationships

     

    One of the most common reasons for broken relationships is poor communication. The inability to convey or receive important information from your counterparties can cause serious conflicts and confusion. Establishing a system for effective communication is the first step to better understanding their capabilities and requirements.

    Ensuring that counterparties have an equal opportunity for profitability builds trust and strengthens relationships. Further, measuring their performance with scorecards, ratings, and reviews promotes transparency between both businesses.

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    Create an open culture internally (Sales, HR, Finance)

     

    Enabling easy communication across functions ensures that all stakeholders are in sync with contractual expectations and deliverables. Collaborative contract management unlocks numerous benefits, including enhanced enterprise skills, reduced compliance risks, and improved revenue operations.

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    Introduce a ticketing system for other functions to raise contract-related requests

     

    Contracts touch every department in a business. A ticketing system establishes two-way sync between legal and other departments to create, track, and manage contracts effectively. In addition to distributing and assigning contract requests to the right contract owners, ticketing software automates simple tasks to save you time and resources.

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    Create contract forums for teams to quickly seek guidance and share best practices

     

    Cohesive teamwork builds on effective communication. With the right internal communication tools, teams can discuss day-to-day operations and contract matters anytime. Operational teams can also get contract manager guidance on maintaining contractual records and monitoring compliance.

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    Choose a CLM system that promotes cross-functional collaborations

     

    Choosing a robust CLM solution that integrates seamlessly with your existing technology stack empowers your teams to speed up coordination, eliminate emails back and forth, and achieve targets on time.

    Related reading:

    Zoho CRM and Contracts integration

Talk to our product experts to learn how Zoho Contracts streamlines contract management and improves efficiency in all aspects of contracting.

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