As your company and operations grow and scale, it’s not surprising that your contracts will also become more complex.
This can cause common challenges like missing deadlines and compliance risks, and poor contract management makes these even harder to address. Without a solid contract management system, your business is exposed to unnecessary liabilities and lost revenue.
In this article, we’ll get into the most common contract management challenges, how they affect your organization, and how you can address them head-on with the right software solutions.
What is the biggest challenge people who manage contracts face?
One of the biggest challenges is a lack of visibility across the contract lifecycle.
Why?
Your teams need to be able to easily track contracts through all stages, including creation, negotiation, approval, and renewal. When they can’t do that, it leads to bottlenecks, missed opportunities, obligations, and errors that you simply can’t afford.
This means there’s a need for centralized oversight over the entire process.
Without this, you’ll find it hard to:
- Identify expired or auto-renewable contracts
- Track all versions of the contract, including changes made during negotiations
- Make sure contracts are compliant and meet regulatory/internal requirements
- Get approvals and signatures when you need them
Having visibility and a centralized system for your contracts is how you move away from using disparate tools like email, shared drives, spreadsheets, etc., which create a fragmented and inefficient process.
On the contrary, a unified contract management system leads to better business continuity and focuses your efforts on your bottom line.
Most common contract management challenges and how to solve them
Here’s a breakdown of the top five contract lifecycle management challenges and what you can do about them.
1. Poor contract organization and storage
Are your contracts living in different folders, systems, or even inboxes? That means your teams are likely wasting valuable time trying to find them. What’s worse is that there could be missing deadlines and clauses that could have been avoided in the first place.
With a centralized contract repository, you can search, tag, and filter components of your contracts easily. PandaDoc offers a contract repository that allows you to create and store all of your agreements in one place, making it easy to find exactly what you need, when you need it.
2. Inefficient collaboration and approval processes
With every contract going through multiple stakeholders and several rounds of revision, your workflow needs to be seamless. If not, you’ll risk version control issues and delayed approvals, which can completely derail a deal. It all comes down to the ability to collaborate.
Automation is your ally in addressing this issue. The right contract management software offers workflow automation and collaboration tools that let you edit, comment, and approve routing in real time. This means that internal and external parties can work together on agreements more smoothly with clear audit trails and role-based permissions.
3. Missed renewal and expiration dates
If your current contract management system makes tracking renewals or expiration dates difficult, you might run into unwanted auto-renewals or even lapses in service. Fixing these issues is frustrating for all parties involved and can cause partners and customers to lose trust in your service.
The key to this challenge might seem simple: setting up automated reminders for your deadlines. This is a necessary feature for contract lifecycle management, and tools like PandaDoc have this built-in capability so that nothing falls through the cracks, especially key dates and deadlines.
4. Regulatory and compliance risks
Most contracts must adhere to industry regulations, local laws, and internal company policies. Without proper compliance, you could be charged with fines, legal disputes, and damage to your reputation, all of which you want to avoid.
You can combat this challenge by creating standardized templates with pre-approved language. You also want to make sure all contracts go through a compliance review process so that you don’t have issues down the line when it comes to enforcing consistent terms or tracking clause usage across your business.
5. Lack of performance tracking and reporting
In any contract management strategy, you need to be able to see the data on how your contracts are performing and where things are getting held up in the process.
Take advantage of contract analytics and dashboards that track everything you need to know about performance, including contract value, lifecycle timelines, close rates, etc. Contract management software offers reporting features that help you optimize your contract process while forecasting possible risks based on real insights.
How do you handle contract disputes effectively?
The unfortunate truth about contracts is that, at some point, disputes are inevitable. But how you handle them is what matters.
To help you resolve issues before they escalate, here are a few contract management tips:
- Give clarity upfront: Using clear, unambiguous language, avoiding jargon, and defining key terms in your agreements will set you up for success.
- Document all changes: You can avoid confusion by keeping detailed records of all revisions, approvals, and communications through a contract management tool like PandaDoc.
- Use dispute resolution clauses: In your contract, include provisions for mediation or arbitration. This will help guide the resolution process later.
- Act quickly: Don’t wait to address a dispute when it arises. Contact your legal counsel immediately if necessary, and always try to preserve the business relationship. This will help build stronger trust, particularly if you continue working together down the line.
How can technology help overcome contract management challenges?
Digital contract management solutions are the key to making the contract process faster while reducing risk and improving consistency across the board. Plus, they eliminate the need for manual steps that bog down your teams’ workflows.
If you want to streamline your negotiations, reduce errors, and have better control over contract milestones, PandaDoc has you covered with its built-in automation and centralized tracking.
A unified platform means faster contract creation and better collaboration, so you can trust that nothing will get missed. This is especially important if you’re working to scale your business.
That was the case for our client, Remofirst, who knew they needed a solution to automate their contact generation while integrating it with their CRM. They were wasting valuable time manually generating proposals before they switched to PandaDoc. Now, they’ve saved 15 minutes per proposal, and trust us—this time adds up!
“PandaDoc has changed how we approach contracts, not just in terms of efficiency, but in the quality of the decisions we’re able to make. We can actually spot trends and adjust our strategy based on what the numbers are telling us. That kind of visibility is priceless for a volume-driven business like ours.”
– Christopher Ginty, Director of Revenue Operations at RemoFirst
How to implement a good contract management solution
Adopting new software is a great place to start when it comes to implementing an effective contract management solution. Here’s how you can do it in a way that aligns your workflows and supports your business goals:
- Map your current process: Figure out where there are delays or breakdowns in your process, especially around approvals, renewals, and compliance.
- Set clear priorities: Decide what success would look like for you, whether that’s faster contract turnaround times or better visibility on the contract lifecycle. This will help you measure how well your strategy is working later on.
- Select the right tool: The right platform for you should integrate with your CRM, support your team as you scale, and be customizable to your team’s workflow.
- Establish consistent practices: If you use standardized templates, approval routing, and version control (think: tracking document changes), you’ll minimize legal and compliance risks while speeding up the entire contract process.
- Invest in training and onboarding: Make sure your team is well-trained in the new software you invest in so they feel confident every step of the way!
- Review and refine: Keep track of your contract performance metrics and adjust your workflows as needed. This will lead to more efficiency over time and a more scalable process as your business grows.
Don’t wait to improve your contract management strategy
Understanding the common challenges of contract management and investing in the right tools and processes will help you keep your contracts organized and compliant and make the process smoother and more efficient.
Ready to make managing contracts faster and easier? Try PandaDoc, start your free 14-day trial today!
Disclaimer
PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDoc services are governed by our Terms of Use and Privacy Policy.
