Monitoring changes, also generally referred to in the context of “redlining,” is a part of the contract lifecycle management that relates to editing contract clauses. It is common for many people and legal teams to discuss, read and suggest changes to the current version of the contract’s clauses. The redlining stage is generally regarded as the longest-running step in the contract lifecycle and could take months to complete.
This is because organizations usually require input from multiple departments and other parties in reviewing contracts. The redlining process is a series of phases as it is revised over rounds. Various parties read the document, alter it, then forward it to the other parties several times while the document goes through several revisions.
By using small business contract management software, the entire process should be swift, precise, and focused on the needs of the client. But redlining is a long and time-consuming process. By enhancing how your business monitors change to contracts, you can streamline your contracting process and ensure that contracts are correctly and swiftly reviewed – making clients have the best experience. By doing this, you will set your business to succeed by creating an opportunity to finish transactions quicker.
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Who Is Responsible for Reviewing Contracts?
The process of contract reviewing often has multiple people involved, based on the parties involved in the contract.
It could start with the sales rep who drafts the first contract and determines the most important value after taking the contract template’s basic phrases. The person who drafts the contract should examine the entire contract carefully for accuracy before sending it over to their counterparty and members of the legal department.
The counterparty must examine the proposed agreement to ensure that the agreement’s legal, risk, and commercial consequences are in its favor. It is recommended to have a contract expert or legal advisor look over the contract at the end of each round of negotiations and before when the agreement is signed.
The review of contracts is the final chance for the parties to make changes and identify issues before signing. Once the contract is accepted, it’s now a matter of obligation management. Parties are seeking to anticipate specific contracts, such as re-negotiations or opt-out periods, to ensure they aren’t surprised by important deadlines and dates.
How a contract will be evaluated is based on the reviewer’s job. The counterparty reads the contract line-by-line, making changes and recommending others while contemplating an agreement that both sides can agree to. They’ll usually return it with modifications. However, the party who wrote the document will be required to look over what was altered or rejected.
The Best Ways to Monitor Changes to The Management of Contracts
Centralized Editing
In many organizations, contracts are kept in shared drive folders. When reviewing the document, employees must find the document before opening it, editing, and saving a fresh draft. The issue with this method is that if two individuals edit the same document simultaneously, the changes may be lost or altered. Although some organizations attempt to stop this from happening by restricting access to documents to only one person, this method significantly delays reviewing.
A contract management system solves this issue by offering an incredibly secure and central area where multiple employees can edit a single document instead of creating multiple versions of the contract. It not only lowers risks by preventing the loss of modifications or redlines that have been overwritten and redlines, but it also saves many hours. Certain platforms also offer users roles and permission settings that allow business managers or contract managers to give employees read/write access to a specific document.
Version Control
The most unwise method to manage the process of reviewing contracts is to manage all drafts within a single email chain that is back and forth between participants.
With specific contract management system, version control can streamline this procedure by giving multiple participants the chance to look over a document simultaneously. It allows them to edit the same draft, and version control monitors and integrates each contributor’s modifications within the same document. Using version control lets you ensure that every contributor is working on the most recent draft while speeding up the review process and protecting from editing and tracking differences.
Audit Trails
When multiple employees are reviewing one contract simultaneously, determining who made which changes and when is essential allows for transparency in managing contracts and more insight into what changes were made by which departments.
Because employees log in to an online portal and your contract management system can be equipped to offer an audit trail that documents each step performed during the process of reviewing. The audit trail could reveal contract managers and leaders who uploaded the most current versions of contracts or changed an existing document with the event’s time.
Sign
In today’s competitive business world, businesses cannot afford an excessive amount of client contracts that are stalled in the legal queue. The manual, outdated processes for reviewing contracts and tracking changes are costly, time-consuming, and do not generally grow. To stay ahead and competitive, companies need to figure out ways to speedily streamline their contract reviews and redlines without committing any errors. There’s good news: that contract management software can be of assistance.
Final Words
The process of tracking changes is an integral part of managing contracts. If it is not done properly, the company could exhaust the available time on any project. In the absence of confidential information of documents, using an approval process for check-in/checkout to allow revisions, improving the visibility of the entire change process and centralizing access to templates for contracts and clauses, and ensuring that contract language within pre-approved boundaries and you’re taking significant steps to make your Management more efficient.
