Simplify Your Contract Management System with Smart Numbering

Simplify Your Contract Management System with Smart Numbering

Simplify Your Contract Management System with Smart Numbering

May 16 2024 by webcm

If you’re new to contract management systems, you might be wondering about the best way to organise and keep track of all your contracts effectively. One of the top tips a seasoned contract manager will pass on is the benefit of a well-structured numbering system. In this blog, we’ll discuss the key components of a smart contract numbering system and how it can help you streamline your contract management process.

Why Use a Contract Numbering System?

A contract numbering system helps you:

  • Easily identify and locate specific contracts
  • Keep track of the total number of contracts
  • Categorise contracts by type and financial year
  • Stay on top of contract obligations and deadlines

Essential Elements of a Smart Contract Numbering System

A smart contract numbering system should include three crucial components:

  1. Financial Year: Include the financial year in your contract number to easily identify contracts due for review or renewal, especially for multi-year agreements.
  2. Contract Type Acronym: Use a short three-letter acronym to represent the type of contract (e.g., MOU for Memorandum of Understanding). This provides a quick visual reference and helps you categorise your contracts efficiently.
  3. Sequential Contract Number: Assign a sequential number to each contract within the financial year to keep track of the total number of contracts and make it easier to locate specific agreements.

What it Looks Like

Let’s just say you’re managing contracts for an aged-care facility. You have three main types of contracts: Service Agreements (SVA), Supply Agreements (SPA), and Employment Agreements (EMA). Without a numbering system, your contract files might look like this:

  • Service Agreement – ABC Physiotherapy
  • Supply Agreement – MediSupply Pty Ltd
  • Employment Agreement – John Smith (Nurse)
  • Service Agreement – XYZ Cleaning Services
  • Supply Agreement – FoodMasters Inc
  • Employment Agreement – Jane Doe (Caregiver)

As you can see, it’s difficult to quickly gauge how many contracts you have of each type or from which financial year they originate. Now, let’s see how these contracts would look with a smart numbering system that includes the financial year, contract type acronym and a sequential number:

  • 22-SVA-001: Service Agreement with ABC Physiotherapy signed in FY 2022
  • 22-SPA-001: Supply Agreement with MediSupply Pty Ltd signed in FY 2022
  • 22-EMA-001: Employment Agreement with John Smith (Nurse) signed in FY 2022
  • 23-SVA-001: Service Agreement with XYZ Cleaning Services signed in FY 2023
  • 23-SPA-001: Supply Agreement with FoodMasters Inc signed in FY 2023
  • 23-EMA-001: Employment Agreement with Jane Doe (Caregiver) signed in FY 2023

With this numbering system, you can easily:

  • Identify the type of contract at a glance (SVA, SPA, or EMA)
  • Determine the financial year in which the contract was signed (22 for FY 2022, 23 for FY 2023)
  • Keep track of the total number of contracts of each type and from each financial year
  • Locate specific contracts quickly by their unique identifier

Benefits of Using This Numbering System

Implementing a contract numbering system offers several significant benefits:

Easy access and review of contracts relevant to a specific financial year

With the financial year included in the contract number, you can quickly filter and access contracts from a specific year. This is particularly useful when you need to review contracts due for renewal or those that are expiring soon. For example, if you want to review all Service Agreements from FY 2022, you can easily filter your contracts by “22-SVA” to access the relevant documents.

Quick identification of contract types through acronyms

Using acronyms for contract types allows you to identify the nature of the agreement at a glance. This saves time and effort when searching for specific contracts or when you need to group similar agreements together. For instance, if you need to find all Supply Agreements, you can search for contracts containing “SPA” in their number, such as “22-SPA-001” or “23-SPA-001”.

Simplified contract tracking and management with unique identifiers

By assigning a unique identifier to each contract, you can keep track of the total number of contracts and easily locate specific agreements when needed. This is particularly helpful when dealing with a large number of contracts across different departments or teams. The unique identifier ensures that no two contracts have the same number, reducing confusion and potential errors.

Improved efficiency in contract administration through clear structure and organisation

A well-structured numbering system brings clarity and organisation to your contract management process. It allows you to quickly sort, filter, and analyse your contracts based on various criteria, such as financial year or contract type. This improves overall efficiency in contract administration, saving time and resources while reducing the risk of missing important deadlines or obligations.

How to Implement a Contract Numbering System

To successfully implement a contract numbering system in your organisation, follow these steps:

1.     Create a standardised list of contract-type acronyms

Start by identifying the most common types of contracts your organisation deals with and assign a unique three-letter acronym to each type. For example, Service Agreements (SVA), Supply Agreements (SPA), and Employment Agreements (EMA). Ensure that these acronyms are intuitive and easily understandable by all team members involved in contract management.

2.     Train your staff on the new system and its benefits

Conduct training sessions for all staff members involved in contract management to familiarise them with the new numbering system and its benefits. Explain how the system works, how to apply it consistently, and how it can improve their day-to-day contract management tasks. Encourage staff to provide feedback and suggestions for further improvements to the system.

3.     Consistently apply the numbering format across all departments and teams

Once you’ve established the numbering format and contract-type acronyms, ensure that all departments and teams within your organisation consistently apply this system to all new contracts. This maintains uniformity and avoids confusion when dealing with contracts originating from different areas of the organisation.

4.     Update existing contracts to the new numbering system to maintain consistency

To ensure a smooth transition and maintain consistency, update your existing contracts to the new numbering system. This may require some effort initially, but it will pay off in the long run by ensuring that all contracts follow the same structure and are easily searchable within your contract management system.

By following these steps and consistently applying the contract numbering system, your organisation can reap the benefits of improved contract organisation, tracking, and management efficiency.

You Can Never Be Too Organised

Now you’re well on your way to streamlining your contract management process – but why stop there? At WebCM, we’ve built our entire platform around the principles of simple, intuitive and efficient contract management.

Developed by seasoned contract management professionals, WebCM is designed to help you take control of your contracts and stay organised every step of the way. Experience the power of WebCM firsthand by signing up for a 90-day free trial. During this time, you’ll have full access to our platform and all its features so you can give it a proper test drive.

To get started, visit our website and reach out via our contact page. One of our friendly team will be in touch to set you up and provide you with all the support you need to make the most of your trial period. We look forward to partnering with you on your journey to contract management success!