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Contract Numbering by jigordon
February 27, 2007, 6:00 am
Filed under: contract management

How many contracts do you maintain? As a negotiator for a variety of business sizes, I would guess that if you are in an organization of over 100 people, you have more than a handful of contracts to maintain. Software licenses may be but one of many different types of documents as well. Building and vehicle leases/rentals, event/travel management contracts, employment or consulting agreements, customer contracts, too… the quantity of contractual documents can simply be staggering once they start being pulled out of desk drawers and file cabinets.

But how do you track them all? Even if you have a contract management system, trying to keep your arms around them only by their name or document type, or even by the vendor, customer or service provider is virtually impossible. For this reason, contract numbering (and a contract numbering system) is an absolute for contracting best practices.

Contract numbers have historically been used by ultra-large vendors, where a number relates to a particular sales opportunity. But contract numbers are no longer the exclusive purview of the large business. In fact, a simple contract numbering scheme can be created even if the only contract management system you have is an Excel spreadsheet.

First, remember that contract numbers must be 100% unique per document… but that you want a way to tie related documents together by the contract number so that you know which documents need to be reviewed together when you have a contract issue to resolve.

Second, contract numbers can be created in almost any form or fashion, depending on what you find easy to track. Generally, they contain some sort of party identifier (like the first few letters of the other party’s name), a unique number of some form, and an indicator of the document type (so you can watch amendments, SOWs, etc as compared to Master agreements, licenses and so forth).

Third, contract numbers MUST be consistent to be valuable. If you use them sporadically or inconsistently, it will not only not serve you, but it will confuse anyone else looking at your documents later.

With these three rules in mind, the Software Licensing Handbook details a specific contract numbering scheme that works in a variety of situations. But the goal is to simply come up with a scheme that works for you and your organization. Write the number in a consistent location on each of your documents (I prefer the upper right corner of the first page). Track it in some electronic manner for ease of search later.

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