Risk management is an important part of ensuring that your company’s projects are successful and mitigating risks that can harm your business. That’s why contract management is vital in risk management because there are certain risks that are involved in any legal agreement.
There are a few important risk factors that you should consider in your contract management strategy, including lack of contract compliance and governance, unauthorized access to contracts, missed expiration and renewal dates, and broken contractual obligation. This is why having contract management software can help you mitigate the risks efficiently without manually doing it by yourself or using different contract management tools. If you’re wondering how to mitigate contract risks and ensure your legal agreements are airtight, read on! This article will provide a primer for evaluating and mitigating contract risks.
1. Implement Business Processes Using Automated Workflows
You’ll never have to worry about compliance with your business processes to mitigate contract risks associated with a missed step or approval. With contract management software, each stage of your business process is documented and automated in contract workflows based on the business rules that anyone involved should follow.
Through contract management software, you can easily build and trigger any part of the workflow so you won’t have to manually track and facilitate each step required in a contract lifecycle. In the event of an audit, you can easily gather compliance evidence from the contract management software.
2. Regulate Access Permission with Role-Based Security
The contract management software will allow you to set up role-based permissions, allowing a person to write or read a specific or contract but denying them access to others who have no permissions. In this way, the software prevents unauthorized people from editing or even seeing any contract details. This is one effective way of mitigating the risks involved in acquiring unauthorized access to confidential and proprietary information.
3. Use Alerts and Notifications to Avoid Missed Obligations and Milestones
Missing automatic contract renewals or conditions activated through certain milestones are risks that lead to significant financial repercussions. Through the use of contract management software, you will be able to set up alerts, calendar reminders, and tasks linked to a specific contract data record so you won’t miss any critical contract milestone.
4. Use Encryption to Protect Contract Data
Another way to protect your contracts from the risks of unauthorized access is to encrypt all your data. This is especially important to protect your data from people outside your company. Using the best contract management software, you can encrypt information using the latest encryption standards.
5. Secure Approvals Through E-Signatures
E-signatures can carry digital records of who, where, and when a document was signed and ensure authenticity. This allows documents to be signed faster and more secured as compared to actual paper signatures.
Using e-signatures, you can mitigate the risks of tampering with contract approvals and even misplacing a hard copy of a contract. It’s also a great way for the contract approver to sign the document anywhere because it supports online access and mobility. This means that you can sign virtually anywhere using your mobile device.
Risk management is important to mitigate as many risks as possible to prevent ultimately harming your business. Having a contract management strategy is essential in any risk management plan. However, manually mitigating risks in every legal agreement won’t be as efficient as contract management software. This software can help you set up triggers, alerts, notifications, encryption, e-signatures, role-based security, and automated workflows to manage your contracts virtually anywhere you are with a few taps on your mobile device.
Anapact is a contract management software built to serve as an easy tool for small and mid-sized businesses to help reduce risks and ensure compliance. Contact us today to get a demo!