By Greg Buchholz
Small and medium-sized businesses (SMBs) have it rough when it comes to cybersecurity risk. Sixty-one percent have been hit with with a breach in the last year, and the worst breaches cost these SMBs between $84,000 and $148,000 – enough to put many out of business.
However, despite the heavy risk, many aren’t doing themselves any favors – especially when it comes to contract management. Seventy-one percent still handle the process manually. The hardships that come with doing so not only put SMB data at risk – they’re also downright inefficient. It’s no wonder that nearly half say their average contract lifecycle goes on for more than a month, according to SpringCM research.
From redlining numerous Microsoft Word docs to monitoring the editing permissions for countless individuals, the contract management process is stressful, and it needs all the support it can get. Here are a couple of pitfalls that SMBs want to avoid, and how to work around them.
- Relying on email – Eighty-five percent of people admitted to attaching contracts to emails in a recent study. With the rate at which professionals fall for phishing scams (more than one in five), the risk of a contract being breached by an unauthorized third party isn’t exactly low. Security risks aside, however, contract editing and negotiating over email lacks the organization needed for a smooth process.
- Losing track of versions – It’s not uncommon for a contract to evolve through 40 or 50 versions. When it gets to such an extreme point, it can feel impossible to keep the most current version straight among all the emails and attachments. Plus, when a party comes in and starts redlining the wrong version, the confusion only deepens. Though with the lack of structure that isolated email attachments provide, who can really blame them?
- Missing out on an audit trail – An audit trail accompanies a live document and makes the whole process visible, including every edit, its timestamp and its author. It creates an advantage in the event that an unauthorized party gains access to the contract and makes changes. It also negates the need for multiple versions since it provides a live look into the lifecycle of the contract. Without it, however, the editing history of a contract is murky at best.
Avoiding the pitfalls
For the safety of your business and partnerships, you need to prioritize measures that bring the contract process under tighter control. With that safety also comes more productive practices. Automation holds the key to securing and optimizing the the contract management process thanks to several key capabilities.
With automation, email can act as a supplement to a process, instead of serving as the main channel. Email creates too much space for error – one typo in an address, and strangers could be looped into a sensitive or even confidential matter.
It also allows for one central live document, which prevents the need for going back and forth and creating multiple new contract versions each round. Because of its live editing capabilities, all changes must be accepted by the owner, providing a clear ledger of each change to the document since its inception. In hosting the contract on an encrypted platform, the whole process becomes clean, secure and transparent.
Contract negotiations are messy by nature, thanks to the number of voices involved and the ongoing edits. But your contract management processes don’t have to give way to the mess. By cleaning up your practices to look out for data security and greater efficiency, you set your SMB up for a strong future of closed deals.
Greg Buchholz is the senior vice president of SpringCM + DocuSign.