What are the best practices for keeping track of contracts?

To effectively manage contracts, it's crucial to follow best practices such as maintaining a centralized repository, creating a contract register, implementing version control, access control, metadata and tags, renewal and expiry alerts, document naming conventions, audit trails, calendar integration, compliance tracking, backup and recovery, regular reviews, staff training, legal support, vendor management, and documentation of correspondence.

The document control is the basis for effective and efficient contract management. But, unfortunately, it is neglected, because it requires discipline, standardization and a good tool. And, most importantly, professionals who understand the benefit and enjoy the topic.

A CMS not only helps automate majority of the less value tasks but also, reduces the contracting cycle. While evaluating ensure that the CMS has AI modules that can help with auto-marking obligations and extracting metadata from legacy contracts. These features can streamline the process further!

Agree.. like CMS we have another softwares also like AMS in that we can track the contract will get the reminder before expiry of the of contract (Prior date as defined by us) and we can also monitor and upload the KPI of vendors and Receipt and payment of Invoices.

To keep track of contracts effectively will require starting with a policy, creating the requirements and the support for processes which will provide you with your desired results, which should also be defined in your policy.

The essential tool in tracking the contracts, it could be maintained and updated centrally, with the access to different sections to review and provide the input.

Another way could be, assign the contracts to different employees to work on it, and review the work weekly or fortnightly. This could work well when organization have multiple Contracts with multiple contractors.

When defining actions towards contract management, and business in general, a clear way of defining roles and responsibilities is adopting the responsibility assignment matrix at every action / stage where RACI is needed. Also, it is very important to describe the expected output and inputs required. RACI should also contain backup and escalation if possible.

The sweet spot for this is having a CMS that natively integrates with Operations and Financial ERPs. If you don't have the above, I recommend you to set up an automated dashboard with your industry and client segmentation usual KPIs, integrated and automated as much as possible with respective ERP(s) modules, ideally with trigger automated escalation matrix if needed. Setting the right KPIs and trigger parameters is key.

In monitoring the performance and compliance, ensure that the communications between parties are documented and addressed accordingly, any communication not addressed could form a basis of dispute. With the use of contract management register keep track of the lessons learnt and solutions for future reference.

Particularly important when the problem regards contract interpretation misalignment by parties: the faster the interpretation is formally aligned, the better (ideally, in the form of written communication, or with contract addendum if needed). One key root solution to avoid interpretation misalignment is to write down examples (on the contract) of business rules in case needed for complex conditions that might be open for interpretation -- e.g. complex pricing mechanism should include exhaustive limit tier parameter use cases.

Delegate the ownership. Assign responsibility. Train and coach the team how to track. Develop procedures and processes to streamline tracking

Oral communication is never a form of communication that could be binding except if agreed to be recorded and be used. There should be no ambiguity in communication between contract parties to avoid misinterpretation and there is a need to close out on any raised situation communicated through written requests, meetings and reports which forms the basis of Contract monitoring.

Reviewing frequently the contract in mutual terms is essential. The review has to be done with various stakeholders, starting with the prime contract administrator, contract manager, legal, compliance, contract executor, and finally the contractor. The biggest challenge and fear factor lies with both the contracting parties is not to talk with respect to contract. This they think, assuming it would spoil working relationships. Owner feels work may not be done to the expectations and the contractor worries loosing his Cash flow. In reality, if the contract clauses are taking as a cross reference to align and meet the contract expectations, the sense of intent and ask from both the parties would be in par.