5 Common contract management mistakes and how to avoid it

Be the most skilled professionals or the most proficient legal teams - nothing or nobody is 100% protected from errors. When companies are dealing with thousands of contracts, it is very much possible that these contracts may have something amiss. This can be completely avoided by seeking help from a more reliable and efficient solution.

We are living in the age of digital transformation. And, there is no reasons why contracts should be left behind. Here are five common contract management mistakes that can be avoided with a digitized, AI-powered solution. Read on:

Manual contract management

When contracts are managed physically or on shared spreadsheets, it’s obvious that an organization is not going to be able to keep a track of milestones and different stages for all its contracts. This leads to excessive confusion, missed opportunities, bottlenecks in lifecycle management, and has a negative impact on the revenue overall.

Solution: Using an effective CLM solution can solve all these issues and let companies be on top of all their contracts. Companies can save lots of time, money, and efforts with the help of a solution that takes care of contracts right from the authoring phase to renewals. In between you can collaborate and negotiate, track obligations and compliances, avert risks, and get notified on all important milestones. This not only makes the management of contracts easy but also helps increase the overall revenue of an organization.

Outdated authoring methods

Organizations that manually draft their contracts are subjected to error-prone documents. From data entry errors like the wrong date or name on a contract to contract collaboration bottlenecks - outdated authouring methods can actually be a cost to a company.

Solution: A CLM solution with automated contract authoring capabilities can help resolve all the above mentioned issues. It can make it easy for organizations to produce a contract that is not just error-free but also takes into account and highlights probable risk clauses and helps keep track of all versions of a contract before it is finalized.

Inefficient contract storage

Without having an established place to store contracts, organizations rely on having cases and cupboards full of physical documents or email threads and spreadsheets. This is the easiest way to lose contracts and their versions that include confidential and essential data.

Solution: Create a contract repository. A secure and validated contract repository helps an organization store all their contracts in one place and creates a single source of truth. By doing this, companies can not only oversee all their contracts but also track different versions of a contract, impose audit trails, improve document collaboration, track contract milestones and so much more.

Organizations can establish access controls on sensitive information like payments cards and identifiable information within a system to keep contracts protected and also avoid any possibility of data theft.

Ignoring AI benefits

When using artificial intelligence, organizations not only fail in protecting their contracts but also complicate the management of data within a particular contract. This can subject an organization to avoidable risks and expensive breaches of contracts.

Solution: Besides streamlining contracting, AI also helps in analysing contracts and brings forth opportunities with the help of contract oversight and helps in risk management. AI makes data identification and extraction a breeze and also helps seamless authoring with the help of standard clauses.

Analytics and insights provided with the help of artificial intelligence can help identify and mitigate risks by highlighting sensitive data and running a statistical analysis that gives insights and recommendations as to how a particular risk can be avoided.

Unautomated contract tracking

Missed contract milestones, contract performance insights, and fragmented audit trails are all causes of non automated contract tracking.

Solution: A robust CLM solution can help organizations be on top of contracts by automatically tracking milestones and audit trails and get insights on performances in seconds. This means you also get reminders on upcoming contract renewals and expiries ahead of time to prepare for favourable negotiations and revisions.