Every business owner needs to take time to evaluate his business and make it ready for growth. This is the only way you can scale and see if your business is ready for growth. At the same time, you can use this time to evaluate risks and financial losses.
For a powerful evaluation, it’s best that you use contract management reports. If this is your first time hearing the term, keep reading so you can learn more about its importance to your business.
What Are Contract Management Reports?
First of all, let’s talk about what contract reporting is. In a nutshell, it is the process of collecting important data from contracts for analyzing and sharing. Although this is a pretty basic explanation of the report, the data included will depend on the metrics of your business goals.
But usually, its process involves the following steps:
- Contract review – Signed and executed contracts are reviewed by a legal team to look for important data
- Data scraping – The identified data is manually entered into a spreadsheet
- Data analysis – The collected data is filtered based on information and trends
- Data presentation – The information obtained from the analysis is prepared for stakeholders
The entire process is usually done by an assigned employee in the business, which means it can be a tedious task and one that is not exempt from errors. Fortunately, there are now tools in place to help make the process easier. But we’ll get to that later.
Common Challenges In Contract Management Reporting
As mentioned, the process of contract management reporting can be time-consuming and prone to errors. It may be suitable to assign this to an employee if you have a small business. But once your business grows, your contracts grow with the business. As such, it can be next to impossible to keep tabs on your contracts.
Here are some of the challenges that you may face in manual contract reporting:
Missed contract deadlines
Since the process doesn’t usually involve a strict deadline to adhere to, it may be difficult to keep track of your existing contracts. Not to mention, you might end up renewing your unwanted contracts since you weren’t able to stay up-to-date with the information you collected.
Internal disputes
As your contracts grow, it can be hard to keep up with contractual obligations across your internal teams. This can lead to unmet promises and last-minute demands, both of which may escalate into future issues among your employees.
KPI measurement problems
Another problem that you may face with manual contract reporting is difficulty in measuring performance metrics. This is because you might not have established your contract compliance and metrics for your teams.
Thankfully, these challenges can be fixed with the right contract management software.
Benefits Of Contract Management Reports For Business Success
When you create a contract compliance report for your business, you are allowing yourself to stay abreast of existing contracts in your repository. As such, you can make data-driven decisions that can support your financial goals.
Here are some of the benefits of contract management reporting for your business:
Maintain agreements that are making a profit
Contract reporting collects data insights that can help optimize your agreements. Through this data, you can reduce risks, maintain compliance, and let go of unbeneficial agreements.
Improve business relationships
By optimizing your process for contract management, you minimize the risk of missing deadlines and making mistakes. In turn, this improves your company’s reputation among your customers and partners.
Boost your revenue
When you make business decisions based on data from your contracts, you can make the right choices for your business. This also helps your business stay profitable and have room for growth in the future.
Improve your workflows
Instead of allocating someone to create and analyze contract data, you can use software to automate the process. This way, that person’s skills can be better used on another task.
Components Of A Contract Management Report
Now that you know the importance and benefits of contract reports, it’s time to take action and start making your reports. But what do these reports typically include?
- Executive summary – This consists of a concise overview of your report where the key findings, recommendations, and issues are highlighted.
- Compliance review – This is where you identify whether your business has complied with contractual obligations.
- Contract performance metrics – This part includes an evaluation of predefined KPIs that are important to your business.
- Financial analysis – This section analyses the financial aspects of your contracts, such as their profitability, revenue, and financial risks.
- Contract variations and amendments – If there were any changes to the original contract, this is where these variations and amendments are highlighted, along with the reason for the change.
- Dispute resolutions – Lastly, any conflicts or disagreements that have come up throughout the contract’s lifecycle will be included in this part.
Best Practices For Creating An Impactful Contract Management Report
When you’re creating a report, you need to pay careful attention to detail and follow the best practices. Here are some things to take note of:
- Set clear objectives – Business reporting can get overwhelming. This is why you must be selective about the insights you share from your collected data.
- Ensure accuracy and credibility – Make sure that all data you present (along with the facts and figures) are accurate. If you can, support these with reliable sources.
- Use consistent format – Stay consistent with your formatting. Include headings, subheadings, and numbered lists to create a logical flow.
- Be concise and clear – Present your data in an easy-to-understand manner. Analytics tools can be helpful with this.
- Review and revise – Before making your presentation, make sure that you have reviewed and revised your report to ensure it is free of errors and the key components are addressed.
Using Fill To Help Out With Your Contract Management Needs
Don’t let yourself be stuck with boring contract management reporting. Fill has the right tools in place to help make your reports stand out.
Not to mention, Fill offers a comprehensive solution so you can manage your contracts easily. You can make the reporting process a breeze by opting for Fill’s automated process.
Try Fill for free to see what you’ve been missing in your reports.
