Contracts are the foundation for many businesses. You have contracts with customers, clients, vendors, employees, and others. However, one of the important responsibilities businesses have is to monitor contracts. Without completing this important task, you may not know whether your contracts are being complied with or whether any problems have arisen. If you need help with contract monitoring, consider contacting Von Rock Law by calling (866) 720-0195.
What Is Contract Monitoring?
Contract monitoring is the process of tracking the status and performance of various contracts. Contract monitoring helps you determine if the other party is complying with the terms of the contract. Contract monitoring may include:
- Identifying relevant contracts and provisions
- Reviewing the progress of contracts
- Assessing data related to contracts
- Assessing contract compliance
- Checking whether deadlines have been met
- Assessing the quality of products or services
- Identifying and correcting problems
Why Should I Monitor Contracts?
There are many benefits of monitoring contracts, including:
- Monitor their own compliance – Businesses do not want to find themselves on the receiving end of a breach of contract lawsuit. By monitoring their own performance, businesses can ensure they are fulfilling their contract obligations.
- Identify problems early – By continuously monitoring contracts, businesses can help identify problems early. They can identify inefficiencies as well as any obstacles that may threaten the contract’s performance. This allows the business to begin developing possible remedies to problems. Resolving contract problems early can help preserve business relationships and avoid costly legal battles.
- Maintain quality levels – Another advantage of monitoring contracts is that it can help ensure that quality measures are met.
- Help achieve goals – Monitoring contracts helps businesses meet their goals and anticipate growth in the future so they can make better plans for the future.
- Improve contracts in the future – Businesses can use what they learn from contract monitoring to negotiate better terms in the future.
How to Monitor Contracts
Here are some of the steps involved in monitoring contracts:
Identify All Relevant Contracts
The first step to contract monitoring is to identify a prioritized list of contracts to monitor. It suggests placing a higher priority on contracts that carry a higher degree of risk. Contract risks might include:
- Negatively impacting health or safety
- Interfering with the company’s mission
- Misspending money
- Negatively impacting investor confidence
- Preserving relationships with businesses with long established relationships
It is important that you know where all of your contracts are located. It is a prudent measure to store them in a repository where you give access to relevant individuals who can monitor their progress.
Decide What to Monitor
Next, you will want to identify exactly what to monitor within each contract. Prioritize what really matters, such as:
- Obligations
- Status
- Deadlines
- Quality
- Local regulations
- Customer expectations
- Opt-in or -out windows
- High-risk clauses
- Performance
Carefully assess each metric for each contract rather than relying on a generic checklist.
Appoint a Monitor
It is critical to determine who will be responsible for contract monitoring. For example, the United States Equal Employment Opportunity Commission has its own contract monitor who is responsible for monitoring contracts with the government agency. Smaller businesses may fold these responsibilities into another role or may rely on a knowledgeable contract attorney. The experienced California business attorneys at Von Rock Law can assist with monitoring your contracts and devising strategies when problems are identified.
Provide Access
You will need to provide access to the persons responsible for monitoring contracts. Relevant parties should be able to view, search, and locate relevant information in an efficient manner. However, security should also be considered, as well as limiting access to information to only individuals who need the information.
Contract Monitoring Best Practices
Here are some strategies to help make your contract monitoring process a success:
Track Deadlines
Deadlines are one of the most important aspects of contract monitoring. You can closely monitor this aspect of contracts by using calendars, alerts, and reminders that can help you keep your progress on track and avoid potential liability issues. It is important to identify all relevant dates early in the process and avoid finding out last-minute about deadlines.
Build Reviews into the Process
Contract monitoring should be a proactive rather than reactive process. Contract monitoring should ideally be part of the internal process. Resources should be allocated to routinely analyze and review contract progress. There should also be a review of the findings you make.
Establish a Routine
Because contracts are so essential to the success of your business, it is important that they do not get delayed or wind up at the bottom of your priority list. Failing to monitor contracts can result in potential breaches or overlooking significant problems. Contract monitoring can be integrated into your schedule so it becomes part of your business process.
Leverage Technology
You can take advantage of many of the technological tools today to help with your contract monitoring responsibilities. Contract monitoring software is available that:
- Provides a centralized contract repository that is available on the cloud
- Sends reports with important updates, such as approaching deadlines
- Gives automated alerts and reminders about important contract metrics
- Displays information on a customizable contract dashboard to make all of your contracts more visual and accessible
Incorporate Feedback
Any strong contract monitoring process will include a way for you to incorporate feedback from the process into your current and future contracts. If the contract review indicates your business may be at risk for non-compliance, you can begin working to create a plan on how to avoid breach. If your analysis finds that the other party may not be in compliance, you can discuss possible options with stakeholders and your legal team.
Contact a California Business Lawyer with Von Rock Law for Help with Contract Monitoring
One of the most important responsibilities businesses have is to monitor contracts closely for compliance, both for themselves and with whom the parties contract. The team at Von Rock Law can help with the contract monitoring process. If you need assistance with your contracts,
consider contacting our firm by calling (866) 720-0195.
