3 Common Pitfalls of Contract Management and How to Fix Them

If you don’t know when work is supposed to happen, it probably won’t.

The contract management process is complicated enough for your company not to address pitfalls that happen time and time again. In the rush for completing current contracts and finding leads to generate new ones, most companies ignore optimizing their current process(es). As a matter of fact, most companies appear to abide by the maxim “this is the way we have been doing these for years”.

Here are 3 common pitfalls of contract management and how to fix them.

1. Not Allowing Time for Internal Reviews

Project managers know this pitfall quite well. The client meets with your team for the first time and provides a contract delivery deadline. The project manager then develops a schedule with appropriate periods for internal reviews from the client and the company side. A couple of meetings and emails later, the client pushes up the deadline by several days/weeks/months. Chaos ensues, and the first impulse from the project manager is to slash all internal review times by half, if not completely.

This example reflects the fact that many businesses don’t understand what true collaboration means. Both sides are equally guilty for thinking unilaterally; the client lacks the vision of how an accelerated schedule impacts the final product, and the company selects arbitrary periods of time for internal review(s).

The pitfall of not allowing time for internal reviews results in a lack of focus on data other than the delivery date. Particularly with paper-based contract management systems, bottlenecks are created because there is not a bilateral understanding of the required internal review times for different levels of approval. The solution is to use a professional contract management system that shows the entire contract lifecycle, task relationships, and required review times. A contract management system that provides a bird eye’s view of these three elements to both parties allows both parties to focus on data and not just assumptions.

2. Failing to Delineate Client Responsibilities

While we may love to dump the blame of most contract management nightmares on the client, we must realize that clients may simply be unintentionally causing problems. Clients typically use the information provided to them, and if that information is incomplete, they may not have a full picture of the contract lifecycle.

Your client needs to know:

  • The full schedule of the contract lifecycle
  • The expected deadlines for deliverables
  • When they need to provide feedback on deliverables
  • How many revisions they get per deliverable
  • What the allotted internal review time is
  • What the impact of missing deadlines will be

Some clients may demand several rounds of revisions or take a long time to provide feedback because your team did not provide specifics for these items.

A major goal of contract management software is to ensure that its commitments and obligations to customers and suppliers are not only clearly visible but also available for the right people in the organization so they are quickly acted upon. Look for a contract management solution that offers features to track and process negotiation steps using integrated action items.

These action items need to show:

  • Party responsible for task
  • Description of task
  • Position of task within contract lifecycle
  • Time allotted for task
  • Number of allowed revisions (if applicable)

As you can see, the first and second most common pitfalls from contract management are dependent on each other. The client may not provide enough time for internal review, but it may be due to his or her lack of knowledge of what the required amount of time is for internal review. By scheduling automated email alerts for each party involved in the task, you can make sure that everybody is working on the same schedule.

3. Lacking a Contingency Plan

Even when you provide appropriate internal review periods and clearly indicate the client’s responsibilities, you still need to be prepared when things do not go as planned. Unexpected events can occur, and you should be prepared to handle them.

Here are some specific contract management scenarios that require a contingency plan. Each article below addresses how to implement appropriate contingency plans for each one:


Not allowing enough time for internal reviews, failing to delineate client responsibilities, and lacking contingency plans are some of the most common pitfalls in contract management.  Using a contract management solution like Contract Logix would allow your company to address these pitfalls and manage your contracts more efficiently.