What is a contract repository?
An organization’s contracts are kept in one place in a digital file system, a contract repository. It is a safe and organized way to keep track of, handle, and store contracts.
In contract files, you might find:
- Agreements to sell
- Contracts for work
- Deals with vendors
- Deals with resellers
- Agreements not to reveal (NDAs)
- Agreements to rent
- Agreements about service levels
- Court papers
- Paperwork for compliance
- Drafts of contracts
- Renewals of contracts
- Adding to or changing existing contracts
- Proofs such as quotes, plans, statements of work (SOWs), and appendices
With software for managing contracts, it’s easy to add and sort these files by category, type, and date. It limits access based on user jobs and permissions, so only people who can see each document or change the contract can see it. This makes it easy to get to any contract at any time without looking through natural filing cabinets or worrying about keeping the documents safe.
Synonyms
- Contracts database
- Contract repository software
- Document repository
Why contract repositories are essential throughout the lifecycle of a contract
A contract archive is essential to managing contracts at all stages of their life. There are many good reasons to use a contract repository instead of a regular file box or shared drive.
1. Storage and control in one place. All contracts are safe in the cloud so anyone can access them anywhere. This eliminates the need for physical storage space and makes it easy to view contracts from anywhere.
2. Better vision. CPQ and CRM systems can talk to contract management software, which makes it easy to see the state of a contract and follow it through the deal cycle, negotiation, or renewal process.
3. Better security. Contract repositories have advanced security features that keep private documents safe from people who aren’t supposed to see them. They also have role-based access controls that keep workers who aren’t supposed to be there from changing or deleting essential documents.
4. It saves time. Contract repositories automatically handle the administrative work of managing business documents. This frees workers to work on more critical business tasks and saves time on contract management tasks.
5. Organize things better. It is easier to keep track of contract renewals, end dates, and terms when you can group contracts by type, date, and other factors.
6. Keeping the contract. A cloud-based contract repository ensures that all documents are kept and managed following company rules and privacy laws at the national and foreign levels.
How a Digital Repository for Contracts Works
A contract repository keeps all your contracts in one place, making it easier for your employees to find and handle them. In general, this is how it works:
1. Someone on the team writes or adds a new contract to the system.
2. The software for managing contracts compares it to business standards and rules for compliance.
3. The system pulls out contact information to be indexed and put into groups.
4. An administrator gives users the right roles to view, change, or approve the contract (unless the software does this immediately based on rules already set).
5. The system keeps track of the contract throughout its life, recording improvements and changes as they happen.
6. It sets itself to remind you of important dates and events, like when something renews or expires. A system administrator can add more events and alerts to them.
7. It’s possible to store a contract for later use after it has been completed or ended.
During the whole lifecycle of the contract, it can be quickly accessed through a system that looks like a shared drive or the cloud. The main difference between a shared drive and a digital document store is that a contract management system has more advanced tracking, compliance, security, and organization features.
Why using a digital contract repository is a good idea
Database of searchable contracts
One of the best things about using digital contract storage is that it gives you a database to store and organize your contracts. This makes it simple to find specific contracts, terms, or rules written in them.
Keeps contract data organized and in sync
Critical times and milestones in contracts need to be carefully considered. The administrator of a digital library can set alerts for due dates, renewals, and compliance requirements to ensure that nothing is missed. With automated reminders and notifications, you don’t have to keep track of these times by hand. Metadata extraction and sorting also help you find contracts, even if you don’t know the exact date or title.
Change Control
Every contract copy is kept in one place in a contract archive. This makes it simple to find the most recent version of the contract and keep track of changes as they are made. That way, everyone involved can be sure they’re all legally agreeing to the rules they mean to.
Management of the whole lifecycle of a contract
A contract archive makes the whole process of creating, renewing, or ending a contract easier. The system can handle every process step, sending automatic reminders and alerts to keep everyone on track.
Peace of mind
Contract repositories have advanced security features and permissions to ensure only authorized people can view and change documents. This is because contracts often contain sensitive information. A contract store encrypts your record data using AES 256-bit encryption and TLC 1.2 standards. This is the same level of security that banks use.
Working as a team
A standard contract repository lets everyone on the team work together on a contract simultaneously, so there’s no need for emailing back and forth or dealing with problems related to different contract versions. It ensures that everyone is working from the most recent version of the paper by speeding up the negotiation process.
Less money spent
Contracting mistakes cost your company time and money, but compliance mistakes can cost you money in fines and court fees. These costly mistakes are less likely to happen when there is a contract repository. This is because it ensures that contracts are saved, managed, and tracked according to company standards and compliance rules.
Keeps track of contracts across multiple departments
When a company has a contract repository, its departments can store and access contracts in a single database. This makes it easier for teams to work together and see what’s going on, which stops contracts from duplicating or terms from conflicting.
Think about your deal desk team. Your law and sales teams work together to make deals with customers and keep track of contracts. The only thing they don’t do together is work together. A digital contract store lets everyone on the team access the same document without handing it off or sending emails back and forth. This saves time and lowers the risk of misunderstanding. The best thing about contract management software is that it lets you keep track of the process as it moves through the deal cycle.
Lowers the chance of not following through
If a company doesn’t follow the rules, it could face serious problems, such as legal trouble for not paying its bills on time or damage to its brand’s image for accidentally breaking a contract. Your contract management system will know local and foreign laws, and you can set it up to alert you when specific contract laws aren’t followed.
One of the most important ways this helps is with ASC 606 contract modifications. There are changes to how a company recognizes income when it and a contracting party change the contract terms, such as the scope, price, or delivery. When you connect CLM to your other business software, like CPQ, subscription management, and billing, your accounting system automatically considers those changes and responsibilities.
What to Look for in a Software Contract Repository for Making Deals
Access Based on Roles
The most important thing to look for in a contract store is the ability to control who can see contracts. This is because it can have the most significant impact on your business. The software lets you control who can see and change specific papers and features, so only people who are allowed to can see, change, or share private data.
Sharing and Working Together
During a contract’s redlining and negotiation stages, your organization’s different offices must work together with the other party’s team. Getting everyone on the same page is one of the hardest things for most businesses. This causes much trouble and slows the process for weeks or months.
It is necessary to be able to discuss and change contracts in the same interface where you store and share them so you don’t have to keep sending emails back and forth. Keeping track of updates and contract changes also makes the negotiation process go faster.
Safety Features
Security features are essential in a contract store because they protect private contractual information.
The following are the most essential security features for your cloud-based repository:
- Secret key: AES 256-bit
- Firewalls and discovery of intrusion
- 2FA (2-step verification) and digital signatures
- Policies for backing up and deleting data
- Following privacy rules from around the world, such as GDPR and CCPA
Also, your system should be able to do regular security checks on the storage to ensure it stays safe.
Automating the workflow of contracts
It’s not enough for your library to just store files. You should use a system that makes managing contracts easier and faster, from making them and getting them approved to renewing or ending them. In that case, routine jobs won’t need to be done by hand.
That could look like this:
- Contract approval processes are automated based on the rules and thresholds you set. For instance, if the value of a deal is more than $10,000, it goes straight to the executives for approval.
- Pre-approved templates that make it easier for people who aren’t lawyers to make legal papers. You can also change these templates to fit the needs of your business and market.
- Notifications or alerts, are sent when a contract needs to be renewed or runs out. This keeps you on top of contract updates and keeps your business from being interrupted.
- Records show all the changes made to a contract, when they were made and who made them. This makes risk management and compliance easier.
- An interactive contract builder that lets you make NDAs, MSAs, partnership agreements, sales quotes, and other business papers in different file types (like Word, PDF, and HTML).
- Tools for keeping track of who has looked at and changed the contract.
- The ability to comment and change in real-time allows customers, contract managers, and deal desk staff to work together.
- E-signatures are built in so contracts can be signed quickly and safely.
If you can find a CLM system that does all these things and has a document repository, you can speed up the whole process, not just the part where you store and find documents.
The Clause Library
A clause library is a database of standard contract clauses that have already been accepted. Your team can use this database to put together contracts quickly and correctly. It speeds up the process of making contracts significantly, reducing the need for in-depth legal reviews and ensuring that all papers are consistent.
Using rules and templates that have already been accepted lowers the risk of legal problems, ensures everyone follows the rules, and makes managing contracts more efficient. You won’t have to worry about mistakes whenever you make a paper because they’re plug-and-play.
Help from AI
The best contract management tools use AI to help with everything from figuring out how to recognize income after a change to the contract to figuring out how risky it is. You can make risk profiles with these tools based on specific contract terms that might be bad for your business. You also get the ability to predict the future and get suggestions to help you make decisions.
How to Scale
You should choose a contract store that can grow with your business if possible. It is essential that your CLM software can handle a lot of contracts, users, and unique rules without slowing down or putting your security at risk.
The Report
Your contract repository should ideally have some data built in so you can keep an eye on things like
- How long it take to work out a deal?
- How long does each part of the discussion process take?
- Number of contracts in each stage (approval, review, and writing)
With these insights, you can find parts of your contracting process that aren’t working as well as they could be and improve them. This will help you be more efficient and save money in the long run.
Adding things in
Customer Relationship Management (CRM)
CRM is an integral part of your deal repository. You have to have it, too.
- Keep signed files and papers in sync with signer information
- Get information from built-in forms and update the system’s description of each customer
- Put information from CRM fields into the contract repository so that papers have personal information like names and addresses filled in.
- handle extensions, upsells, and cross-sells proactively
- Make sure that other teams in your CRM can access all of the information you put into your CLM tool (like customer information).
- Look at deal records right away from your CRM customer record
- send and receive email and text message information on contracts in real time
It would be best to integrate CLM and CRM because it makes the contract process a smooth part of your customer journey.
Set up, price, and quote (CPQ)
CPQ software is essential for sales teams to have because it lets them:
- Set up deals for goods and services
- Make correct quotes for prices
- Write up sales pitches
When you connect your CLM to CPQ, you can:
- Use up-to-date price data (from CPQ) to ensure the contract is correct.
- Get information about deals from proposals and contracts so that the sales, financial, and legal teams can talk to each other directly.
- Make contracts in the CPQ software, which will be sent immediately to your CLM system.
- Ensure that the price rules in your CPQ tool are followed when contracts are approved.
When you integrate CPQ and CLM, your salespeople can quickly and accurately make contracts. They won’t have to enter data by hand or copy and paste it from one system to another. You also have a better view of the whole quote-to-cash process.
Management of business resources (ERP)
ERP software is a vital part of handling the lifecycle of your contracts. An ERP system keeps track of all financial tasks, from planning and managing expenses to sending invoices and bills.
When you connect your CLM to your ERP, you can:
- Send data between systems automatically (for example, when contracts are signed)
- Set off alerts for cancellations or renewals
- Keep track of payments and collections and see how contracts are being carried out in real-time
- Better audit trails are possible because both tools have built-in document management features
Contracts are an essential part of your finances, so combining CLM and ERP can help you avoid costly mistakes and ensure you stay in line throughout the contract’s lifecycle.
Taking care of vendors
You need a way to keep track of all contracts and papers that have to do with sellers if you hire temporary workers or buy goods or services from them. Having a CLM tool that works with your vendor management system lets you:
- better access to information about vendors in the contract repository
- standardized processes for bringing on new vendors
- automatic alerts when contracts are about to expire (so you can change the terms)
- keeping track of payments and bills by vendor
Having this information on hand can help you better handle your relationships with vendors and ensure that all of your contracts meet legal requirements.
Taking care of subscriptions
Businesses that depend on subscriptions, like SaaS, need a CLM system that works with the tool they use to handle their subscriptions. Now that this is built in, you can:
- Quickly move customer information from the subscription management tool to the contract archive so that documents are filled out automatically
- record and keep track of renewals and regular payments
- Set up alerts for when subscriptions are about to expire or when plans change.
- Handle changes to contract terms (like canceling, upgrading, or downgrading) without any problems.
When you connect your customer relationship management (CRM) to your subscription management, the whole process is streamlined, from getting new customers to executing contracts and renewing them.
Getting paid
Billing software is the last thing companies need to keep track of and handle the money that comes in and out of contracts. For subscription-based businesses, it’s generally built right into subscription management. It’s a stand-alone product for companies that offer services or contracts.
When you connect your contract repository to your payment software, you can:
- Match contract terms with payment terms to make sure invoices are correct and sent on time
- Make invoices automatically based on the terms of the deal
- Set up automatic payments based on contract goals or triggers, like performance or delivery
- Please keep track of payments and get alerts when they’re late or denied
- Get all of your financial information in one place to make spending and planning easier
It will save you much time on tasks like dunning, managing disputes, and other manual billing tasks. It will also give you more control over your cash flow.
