Keep your business organized 1. – Manage your contracts

 
In our new blog series, we will show you a number of – process oriented – ways to keep your business organized, saving you time and energy while most often sparing money for your company. We will go through a number of aspects which may contribute to efficient business operations and may also decrease administration. First of all, let’s see how to manage contracts!
 

What contracts do I have? (for sure)

Let’s see what contract types are almost 100% sure to exist at any company! Details are important, therefore not only categories, but sub-categories and individual contracts will be examined here.
Presence of the following contracts is almost 100% sure at your company too:
  • Fundamental contracts
    • Company founding documents
    • Loans by the owner contracts
    • NDAs
    • Employment contracts
    • Terms and conditions

 

  • Agency contracts
    • Bookkeeper
    • Lawyer/law office
    • PR/marketing agency
    • Sales agency
    • Other partner and subcontractor contracts

 

  • Rental contracts
    • Office rental contract
    • Warehouse, premises, other real estate rental contracts

 

  • Service contracts
    • Telecoms contracts – phone, mobile, internet, etc.

 

  • Leasing and car loan contracts
    • Equipment leasing contracts
    • Car and commercial vehicle leasing contracts
    • Asset loan contracts
    • Credit/loan contracts
 
As it becomes clear from the above, even a startup may have a great number of different contracts, so that it is clear that managing these documents will take time and effort. 
 

How to manage fundamental contracts?

All of the above contracts contain certain data and deriving from that a number of activities which must be done. Validity, expiration, payment options, payment deadlines and a number of other tasks can be included in such documents. Forgetting these tasks may result in serious consequences. Hence, we have a number of tasks related to basic contracts, which we have to complete, therefore enabling the operation of our company. Because of this, it really worth to keep record of these tasks in systems or solutions other than the contract itself! It is really useful to keep track of contractual tasks when the contract is signed: for instance, in case of a telecoms contract, the general manager or finance department shall transfer the payment of this contract every month. Consider dozens of such contracts and you realize that keeping track of all tasks, deadlines, responsible and other remarks. Learning all of these by heart seems to be impossible, usually Excel is used for managing these tasks…however, we still have to follow the deadlines as Excel does not offer such a feature. A free online calendar could be a solution to this problem, yet it only works until the company is small enough. In case of a middle – sized company it is much better to use a system that offers a unified interface and feature set to manage all the above tasks. Henceforth we will discuss these systems in the post. 
 

Storing contracts

Printed contracts shall not be considered as a safe way to store contractual information! Just imagine: what if a fire destroys them all? If a burglar steals them? If an angry coworker destroys them? We suggest never to store contracts in one place and to always have multiple copies of them. Still, it is much better to have all printed contracts digitalized and saved in multiple drives or in the cloud, therefore minimizing the risk of data loss. Archiving expired contracts is also more than important as data from these contracts may be needed even after their expiration. By using an appropriate IT system to manage contract – or other document – archiving, not only contracts will be stored safely and accurately, but thanks to traceability, all required data will be available when needed.
 

Beyond basic contracts – client and partner agreements

Managing contracts becomes a real challenge when a great number of contracts with complex data content shall be managed as such contracts may indicate the need to perform complex business activities. Such activities tend to occur at the same time as multiple contracts indicate multiplicities of business activities and therefore far more complex operational challenges. Imagine having 5 contracts, all of which contain 4-5 deadlines for delivery or project completion – meaning that 20-25 deadlines must be managed at the same time, not to mention all the tasks required to meet these deadlines. In case of partner agreements, the situation is similar: we have to pay attention to partner/subcontractor project deadlines, invoices, payments, costs, quality, and so on. As a company usually operates using both – and even more – contract types, it is clear that managing this complexity requires most organized operations. Managing these tasks manually is time and resource consuming while the possibility of human error is rather high. Therefore, it is the best option to use a system that supports all these activities.
 

A professional solution

A systemic approach to document and contract management makes business activities far more organized and effective. In order to save time, resources and minimize human errors, supportive IT systems shall be implemented at the company. These systems are workflow and DMS systems, where the workflow manages business processes while all documents are managed by the DMS (Document Management System) engine. These systems are not only available, but really affordable nowadays – even for the smallest companies – as cloud technology enables low cost software operations. 
 

Features of an advanced DMS system

As written previously, managing contracts and all the business activities deriving from them can be a great challenge to every entrepreneur, or CEO. These activities shall also be managed, as a large portion of business operations depend on them. In order to streamline these activities, it is suggested that a workflow and DMS system is implemented – thus managing business processes and documents in one unified system. This provides easier, and more cost effective operations, not to mentioned that all documents and document data is accessible from within business processes, resulting in all data being available where and when needed.
 

First, DMS functions of such system shall include the following to meet today’s minimum criteria:

  • Digitizing contracts, accepting digital documents
  • Filing and numbering of contracts, based on their business data
  • Storing and traceability of contracts based on complex search criteria
  • Organizing contracts
  • Archiving documents – including contracts – allowing traceability and accessibility as needed
 

Workflow functions should include at least the following:

  • Modeling business processes, preferably without coding and IT knowledge
  • Complex, flexible user rights management
  • Certain tasks shall be done automatically, including automatic decision making based on predefined decision criteria
  • It shall fit into the existing IT environment of the company, so there’s no need to exchange the existing IT infrastructure
  • Should provide a user friendly, easy to use GUI, eliminating the need of extended training periods
  • It shall be accessible through smartphones – a true minimum function in 2018.
 

Conclusion

All in all, keeping your contracts organized involves the following:
  • Organize and categorize your contracts
  • Digitalization of contracts and business data
  • Content and data extraction and creation of business activities from these
  • Record deadlines
  • Controlling of task completion
 
Beyond these basic tasks, it is more than safe to say that in order to keep all your documents organized, an appropriate system is needed that is able to manage documents and business processes too. Implementation of such a system leads to saving time, energy and costs for your company while making life far easier to all coworkers. 
See xFLOWer’s contract management solution that includes workflow and DMS features to best serve your all-round contract management needs: https://xflower-software.com/contract-management