In an increasingly dynamic and competitive business environment, effective contract management is essential for the success and sustainability of businesses. Contracts form the backbone of business relationships, regulate rights and obligations, and ensure compliance with legal and regulatory requirements. In 2024, the importance of contract management will continue to increase, driven by several key factors.
Organizations can save 2% of annual costs due to contract management.
Why is effective Contract Management important in 2024?
Effective contract management is becoming increasingly important as the complexity of business agreements increases. With global markets, complex supply chains and multiple stakeholders, contracts are becoming more comprehensive and detailed. This requires systematic administration to avoid mistakes, misunderstandings and legal conflicts. Effective contract management ensures that all parties are clear about their rights and obligations, which minimizes the risk of disputes.
Secondly, technological advances provide new opportunities and challenges in contract management. Tools such as ShareControl Contract, built on Microsoft 365 and SharePoint, enable the automation and improvement of many aspects of contract management. This includes everything from storing and organizing contracts to automated alerts and analyzes with Power BI. Such technologies not only improve efficiency, but also ensure that businesses comply with current regulations and best practices.
What is Contract Management?
Contract administration or follow-up of contracts concluded with customers, suppliers, partners or employees. In contract management, the process of managing contract creation, execution and analysis to maximize operational and financial performance within an organization, all while reducing financial risk.
Challenges with Contract Management
Contract management is a complex process that can present several challenges, and these challenges can affect companies’ efficiency and success.
Lack of overview of contracts
One of the biggest challenges with contract management is the lack of an overview and organization of contracts. When contracts are stored in different places and in different formats, it becomes difficult to find the necessary information quickly. This can lead to lost agreements and misunderstandings. With ShareControl Contract, you can systematically store and manage all contracts in one place, and ensure easy access and overview for all relevant parties in Microsoft 365.
Important contract deadlines
Keeping track of all contracts, important deadlines and obligations can be challenging, especially when a company handles many contracts at the same time. Missed deadlines can result in financial losses and legal problems. To prevent contracts from being forgotten, Share Control’s contract solution has integrated notifications and reminders with Power Automate. Set up notifications via e-mail or other messaging systems, so that you are always up to date on upcoming deadlines and obligations.
Explore more: What are the total costs and liabilities of your contracts?
In ShareControl Contract, the first notification is sent to the person responsible for the contract. If the notice is not followed up, a new notice is sent to the next person on the list. In this way, you ensure that you never lose contract renewals, even with employees who have left.
Non-compliance with regulations
Compliance with legal and regulatory requirements is critical in the handling of contracts. Non-compliance can lead to legal sanctions and harm the company’s reputation. In Norway and the EU in recent years, we have seen several legal requirements that set higher requirements for control over data storage from suppliers, such as the NorwegianTransparency Act (CSDDD) and the GDPR. A contract management system can therefore help prevent breaches by constantly keeping control of concluded contracts and applicable guidelines.
Looking for solutions for the Norwegian Transparency Act? Share Control has developed ShareControl Transparency, which helps you collect all data related to the Transparency Act from your suppliers in one place.
Best practices for Contract Management in 2024
Effective and secure handling of contracts is essential for any business. Here are some best practices and tips to ensure your contract management is optimized for success in 2024.
Reporting in Contract Management
Accurate and timely reporting is essential to keep track of the contracts and ensure that all obligations are met. Here are some tips to improve your reporting:
Centralized handling
Use a central system like ShareControl Contract to store and manage all contracts in one place. This provides a clear overview of all active and expired contracts, which simplifies reporting.
Customized reports
Use tools such as Microsoft Power BI to create customized reports that provide insight into contract data. This can include financial performance, key deadlines and contract renewals.
Automated reports
Set up automated reporting capabilities that generate and distribute reports regularly to relevant stakeholders. This ensures that everyone has access to updated information without manual effort.
Financial reporting
Financial reporting is a critical component of contract management and provides businesses with insight into their financial status and future obligations. To improve this process with ShareControl Contract, Excel VBA can be integrated, providing more accurate and detailed financial forecasts. By combining Excel VBA with ShareControl Contract, businesses can benefit from the strengths of both systems.
This is how it works:
- Automation of data import: Using Excel VBA, data from the ShareControl Contract can be automatically imported into Excel. This eliminates the need for manual data entry and minimizes the risk of errors.
- Customized reports: Create customized reports and dashboards that show key information about the contracts. This includes financial performance, cost forecasts, revenue streams and risk assessments.
- Advanced financial forecasting: With VBA, users can create advanced forecasting models that analyze historical data and estimate future financial liabilities and income. This provides a better understanding of economic trends and helps management make informed decisions.
- Risk management: The integration makes it possible to identify and monitor risk factors linked to the contracts. Excel VBA can be used to set up alerts and flag contracts that are high risk, based on defined parameters such as late payments or imminent expiration dates.
Automation of processes
Automation is key for businesses looking to optimize their contract management in 2024. This can reduce workload, minimize errors and ensure that no critical tasks are overlooked. Here are some ways to automate processes in contract management:
- Automatic alerts and reminders: Use features like Power Automate to set up alerts for important deadlines and renewals. This ensures that all obligations are followed up on time.
- Electronic signature: Implement electronic signatures for fast and secure signing of contracts. This reduces the time it takes to conclude agreements and ensures the integrity of the documents. In the ShareControl Contract, you can choose between integration with Adobe Sign or DocuSign.
- Workflow automation: By using ShareControl Contract to automate contract management, the first step is to automate approval processes and document flow. This ensures that contracts go through all the necessary steps without unnecessary delays.
Security and privacy
In an age where data attacks and security breaches are becoming increasingly sophisticated, it is imperative that businesses take security and privacy seriously when it comes to contract management. Securing sensitive data is not only a legal obligation, but also a business-critical task that can protect the company’s reputation and financial stability. Read more about how you can secure sensitive data by digitizing contract management here.
Strong security protocols should be implemented to protect contract data. This involves the use of encryption to ensure that data remains inaccessible to unauthorized parties, both during transmission and storage. In the ShareControl Contract, this is ensured with technology from Microsoft. Access controls are also essential; only authorized users should have access to sensitive contract information. Regular security updates and audits should be performed to ensure that systems are always protected against the latest threats.
Furthermore, all employees should receive training in best practices for data security. Awareness of phishing attacks, safe use of passwords and correct handling of sensitive information are essential to maintaining a high level of security.
ShareControl Contract
ShareControl Contract is an advanced contract management solution designed to streamline and secure the administration of contracts. Built on Microsoft 365 and SharePoint, ShareControl Contract leverages the powerful features of these platforms to offer an integrated solution that makes it easy to store, manage and track contracts.
Read also: How to benefit from digital contract management?
Implementing ShareControl Contract gives you access to a range of features and benefits that improve and ensure efficient contract management:
Centralized library
All contracts are stored on the same platform, which provides easy access and a better overview. This makes it easier to find and manage contracts without having to search through different storage locations.
User-friendly interface
The system is user-friendly and intuitive, making it easy for employees to learn and use it. This reduces training costs and increases productivity.
Security and compliance
Built on Microsoft’s secure platform, the ShareControl Contract offers robust security features such as encryption, access controls and compliance with GDPR and other relevant regulations. This protects sensitive data and ensures that the business complies with legal requirements.
Integration with Microsoft tools
ShareControl Contract integrates seamlessly with other Microsoft 365 tools such as Power BI and Excel. This makes it possible to create tailored reports, analyze contract data and gain deeper insight into financial obligations and trends.
Automated alerts and reminders
ShareControl Contract can be set up with automatic notifications and reminders for important dates such as renewals and expiry dates. This ensures that you never miss a critical deadline, which can save you significant costs and legal trouble.
Increased collaboration
The integration with Microsoft Teams and other collaboration tools makes it easy for team members to work together on contracts in real time. This improves communication and ensures that all relevant parties are informed and involved in the contract process.
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Secure and efficient Contract Management in Microsoft 365
The use of Microsoft 365 and SharePoint provides a robust platform for secure and efficient contract management. These solutions offer built-in security features that comply with strict compliance and privacy requirements, including GDPR. This means that businesses can be sure that their data is handled in line with the latest security standards and legal regulations.
Learn more about Contract Management in Microsoft 365
