Effective contract management requires an in-depth understanding of your obligations, awareness of key dates such as renewals and certainty around compliance across your own business and your third-party vendors.
You need to know your contracts inside out, and if you don’t, you need to be able to easily find and search them for the information you need.
If you haven’t yet achieved the above, or your approach to contract management is still a little disjointed, the likelihood is that you haven’t got a centralised contract repository in place.
In this article, we explore what a contract repository is, why it’s a better route to contract management and how it can benefit your day-to-day.
What is a central contract repository?
A central contract repository - sometimes known as a document repository - is a single, central location where all of your contracts and their metadata are stored. This repository takes on different forms in different businesses, depending on levels of maturity, contract complexity and numbers of users.
Traditionally, businesses have used software such as Microsoft Excel to store their contracts because of its accessibility and cost-effectiveness. However, the use of spreadsheets carries many risks which can expose your business to multiple vulnerabilities including:
- Hidden, unidentified risks such a poor supplier performance
- Human error and increased administrative burden as a result of manual management
- Poor version control which can lead a lack of understanding about obligations
- A single point of failure through over reliance on a guardian of the spreadsheet
- Key dates such as renewals and certification expirations passing by unnoticed.
If your business is experiencing any of the above issues, it’s time to take the next step in your contract management maturity."
It’s time to stop working with solutions that encourage data fragmentation, don’t scale with your business’s growth, and make your internal processes inefficient and cumbersome.
How to put a contract repository in place
Your business will need to go through the process of locating its existing contracts in order to migrate them into a centralised location. Resources will need to be dedicated to extracting and uploading contract data, while ensuring that this is the most up-to-date version.
Depending on the size and complexity of your contract portfolio, this can be a time-consuming task. Contract repository software can help you to digitise legacy contracts and related documents by automatically extracting contract data to speed up this process while improving the accuracy of records.
Any new contracts and related documents should be added to the contract repository to prevent any additional fragmentation. By keeping all records within one secure location, you will be able to create a single source of truth.
Why you should choose a cloud-based contract repository
The time and resources spent on storing and locating contracts, searching for specific clauses and monitoring your compliance efforts will be augmented if you’re using manual processes – whether that’s a combination of Excel and Sharepoint, storing paper files in cabinets, or sharing contract information across emails.
This prevents key roles from focusing on the overarching business objectives as their day-to-day becomes overburdened with administrative tasks.
To take back control of your contracts, your day-to-day workload and your internal processes, your business should implement a dedicated cloud-based contract management solution."
These solutions provide a contract repository as standard, giving your business a more sophisticated route to effective contract management practices. A repository will allow you to store, search, monitor and manage your contracts in one central location.
Benefits of a contract repository
Using contract repository software doesn’t just improve the way contracts are stored. It creates wider benefits at a high level across the business, for individuals in their day-to-day roles and it can even help to improve external relationships with your vendors.
Let’s take a look at the benefits gained from taking a better route to effective contract management.
1. Prevent data fragmentation
Using a combination of manual programs such as Excel or Sharepoint to capture your data may feel like a sensible fit when you’re first starting out – but with different teams inputting different information at different parts of a contract lifecycle’s stage, data is bound to become fragmented.
This fragmentation will increase as your business grows and if contracts become more complex.
Each time a new contract is initiated, or the terms of an existing contract change, your business is at risk of creating new spreadsheets, overwriting existing ones, or individuals keeping contract knowledge in their head rather than storing essential knowledge and making it transparent for the rest of the business.
By using a central repository, you can easily store your contracts and their relevant documents, such as compliance certificates, in a single location."
You can also easily upload contract metadata for new and legacy contracts – breaking down any silos that exist within the business. A contract repository creates a single source of truth for your business.
ContractNow's Contract Repository
2. Improve accuracy through automation
Manual data entry into spreadsheets exposes your business to the risk of human error. Data can be keyed in, easily missed and mistakes with formulas can go undetected. When anomalies exist in your contract metadata, the impact across your business is wide-reaching.
These errors can lead to:
- A lack of understanding around contract obligations
- Renewals being missed if the dates are recorded incorrectly
- Business decisions being made without complete information
- Inaccurate performance and spend reviews
Contract management software that offers a central repository will also allow you to automate your data entry processes. This will get every team across your organisation working in exactly the same way, eliminate human error and give stakeholders confidence in the accuracy of the data stored in the repository.
ContractNow’s AI Extract works alongside the contract repository, allowing metadata to be automatically captured and uploaded. By automating the data entry process, the risk of human error is minimised. Huge time savings are also made in comparison to manually entering key dates, so stakeholders can dedicate more of their day to strategic matters.
All teams can have confidence in the accuracy of the data being stored which will lead to informed and accurate decision making further down the line.
Contract management software that’s built around automation and centralisation doesn’t just make things easier moving forward. It also makes it easier to handle your legacy documents.
Rather than spending months extracting and uploading the information, ContractNow’s AI extract allows you to simply upload any scanned contract document. You can also upload PDF versions of your agreements to quickly generate a complete digital record.
By using artificial intelligence to extra key metadata and store it centrally, businesses can start making plans around accurate information including key dates such as renewals and certificate expiry.
3. Track contracts effectively through growth and complexity
Spreadsheets offer a quick, accessible solution to tracking contracts - but this manual approach to management will only benefit organisations that manage low volumes of fairly simple contracts.
If your business is looking to scale, take on additional vendors, or the contracts underpinning the business become more complex, the continued use of spreadsheets will eventually become unworkable with detrimental consequences.
Teams that are already overwhelmed with contract administration, an issue that we’ll discuss next, will feel the burden as your business grows.
This frustration, lack of time and the requirement to balance contract work with achieving business goals can lead to metadata capture and input falling to the wayside.
A cloud-based contract repository will scale with your business, with some solutions offering the capacity for unlimited users and contracts."
Cloud-based contract management software empowers you to use your contract repository as much more than just data storage – giving you a single, secure and accessible location to better track and manage your contracts.
4. Create efficiency for overwhelmed teams
How much time do you, or people within your organisation, spend looking for contracts? Do you have difficulty locating specific information such as key dates and clauses?
When data is fragmented and contracts are kept all over the place, it is difficult to locate information easily and efficiently. If teams are too busy to prioritise required contract administration, it could also be the case that contracts and their metadata are simply missing.
By using a central repository in place of manual spreadsheets, not only can your contracts be easily found and searched but essential time can be given back to your teams – such as Legal – to focus on their job roles and achieving the business’s overarching objectives.
A central repository gives your business back time, control and focus."
When contracts are stored all over the place, and businesses aren’t working from a single source of truth, hours can be spent trying to locate an agreement. Time then needs to be spent validating that it’s the correct version - particularly if there are multiple copies strewn across inboxes, shared drives and on desks. This can take hours for some teams.
Time spent locating agreements - or specific versions - can cause bottlenecks in the contracting process, increase time-to-signature and lead to frustrations within external relationships.
Contract management software goes further than centralising all agreements in a single location. A contract repository is useful, but depending on the volume of your agreements, it might still take time to locate the exact thing you’re looking for. ContractNow simplifies this with its powerful OCR-powered search engine.
Users can search from any area of the platform for the information they need. Whether it’s a full record or a specific document, finding information has never been easier. Whatever format your agreements have been uploaded in, they are all readable and searchable. The ContractNow OCR engine can understand complex data, handwritten text and form data.
5. Mitigate the risk of non-compliance
If you don’t know where your contracts are stored, then how can you know that your business is complying with regulation?
When your data is fragmented, it’s impossible to create a single picture of what’s really going on throughout your organisation. This can expose your business to financial, reputational and regulatory risk."
If you can’t easily access the right certificates from your suppliers or if you can’t be certain you even have them, you simply won’t be able to please external auditors and prove your compliance efforts.
By centralising your contracts in a repository, you can build an accurate picture of your business, identify any potential instances of non-compliance and take corrective action.
Unlike spreadsheets or any combination of manual contract management, a central repository as part of a contract management solution gives your business much more than somewhere to store your supporting documents.
The efficiency, transparency and accuracy that contract repository software can provide is the basis of any mature contract management approach."
With the right solution in place, your business can stop just storing contracts and start using them as strategic assets that will drive greater value across your business. To find out how ContractNow can help you to take control of your contract, contact us today.