The Importance of Tracking Your Business Contracts for Performance

Contracts are the heart and soul of every business. Not only do contracts specify everything you do and are owed, but they also dictate the terms in which interact with everyone from clients, to vendors, to employees. Realizing this is important, as you need to know what terms your contracts govern and what they do not. You might feel that your business contracts talk about terms that they do not, or you may feel that certain elements of a business partnership are implied rather than stated. If that is the case, it is important to actually analyze your existing contracts to see if what you believe is happening is actually happening. 

While this may sound cost prohibitive, the truth is that you do not necessarily need a contract lawyer or other legal professional to review all of your contracts unless they are particularly complex. Instead, you can utilize a SaaS solution called a contract management software to enact the process of contract lifecycle management on your contracts. Typically, this is done holistically, and is performed through a process called contract lifecycle management. This governs the entire contract process from the request of a contract up until the end or renegotiation of contract. However, if you already have contracts in place, the best thing you do is to actually make sure that the contract has set parameters or KPIs and then make sure that you are tracking these for performance. 

If you do not do this, you will likely cause some issues in terms of the agreements that are specified in the contract. It might be the case that – unknowingly or not – you are not in compliance with the contract that you yourself signed. If this is the case, you want to make sure that you are meeting the deadlines and agreements as specified in the contract. This can result in a breach of contract, which can invite a lawsuit or other legal troubles that you will want to do your best to avoid. 

To avoid this, you should analyze your business contracts to make sure that you know about any mistakes or things to look out for in the contracts you currently have. When doing this, there are things that matter a lot more than others, and it is important to be able to evaluate the difference. For example, a typo in and of itself doesn’t matter, but it does matter if it makes the terms of a contract unclear or if it’s in a particularly important clause of a contract. If this occurs, it might be wise to bring it up to the other party that you signed the contract with to create a new version. This could help to increase clarity between your business and the other party, and will only help the working relationship between you both. 

When managing the lifecycle of your contact, you need to make sure that you analyze your contracts in a way that takes into account local, state, and federal laws and regulations. If you find that your contracts are not in compliance with any of these laws and regulations, even if they have been recently changed, then you need to make efforts to reach out to the other party and create a new contract. This will not only help you better track your contract for performance, but it will also make sure that everything you engage in with the other party is legal and above board.