8 June, 2023

Some documents require an extra measure of care. While a company may generate dozens of sales contracts, the initial master version that serves as a template must be thoroughly vetted to ensure that the terms and conditions are correct. Typically, the master contract is reviewed by multiple parties representing sales, service, and legal departments. This collaborative editing effort is commonly called “redlining.”

The goal of redlining is to produce a single document. The process involves marking up the document to show proposed changes, revisions, or suggestions. Before initiating the redlining process, make sure that all contributors understand the purpose and scope of the document and provide specific instructions on how the redlining process will unfold.

Here is a step-by-step guide on how to redline a document:

Create the Initial Document: Use a word processing app like Microsoft Word or Google Docs to create a “first pass” version of the contract document. Since the document contains critical and confidential information, you should protect the document and the editing process by working on it in an ultra-secure environment, like a virtual data room (VDR). A VDR provides secure document sharing for contributors anywhere in the world, using any device, and provides control over who has access to the master document, as well as limits on their actions, such as read only, copy/paste, print, and download.

Enable track changes: Enable "Track Changes" or "Review" in the word processing software. This feature records and displays changes and edits to the document, with a comments section in a separate column to the right of the main body of the document. While the record of changes made in Word or Google Docs disappear as edits are finalized, redlining software like ShareVault’s Collabloop preserves a detailed history of all changes by date and time and contributor.

Scrutinize the Document: Review the contract document thoroughly, paying attention to grammar, spelling, punctuation, clarity, and overall content. Note any areas that require changes, additions, or improvements.

Make Edits: Start making edits directly in the document. Here are a few ways to do this:

  • Additions: If you add new text, insert it by typing directly into the document. The new text will be displayed in a different color or formatting to distinguish it from the original content.
  • Deletions: To remove text, select it and use the deletion function (usually the "Delete" or "Backspace" key). Deleted text will often be displayed as struck through or in a different color.
  • Modifications: To modify existing text, select the text and type the revised version. The software will typically show the original text with a strikethrough and display the new text in a different color.
  • Comments: Use the comment feature provided by the software to leave specific remarks or suggestions about a particular section. This is useful when you want to explain your changes or provide additional context.
  • Formatting changes: Besides textual edits, you may need to address formatting issues like font style, size, spacing, or alignment. Make the necessary formatting changes directly in the document, ensuring consistency throughout.

Review and Finalize: Have the entire team take a final review. Make sure the legal department and regulatory experts are included in the final review process.

Save and Share: Once all contributors have signed off on the document, save the finalized document and share it, noting key elements of the new master contract and how it differs from any previous versions. If the contract is designed to serve as a template, save the master copy and supply the template to the appropriate departments. If your redlining was done in ShareVault’s Collabloop, generate a version that shows the history of collaboration by name, date, and time, for use in audits and submissions to regulatory agencies.

Benefits of the Redlining Process

Properly executed, redlining a contract or other critical document accomplishes multiple goals:

Clear Communication: Redlining allows for clear communication among the collaborative team by providing a clear visual representation of suggested edits, ensuring that the author understands what modifications are being proposed. This promotes effective collaboration and reduces misunderstandings.

Feedback and Improvement: Redlining enables reviewers to provide specific feedback and suggestions for improvement. By highlighting areas that require attention, such as grammar errors, unclear passages, or factual inaccuracies, redlining identifies areas that need revision. Feedback and revisions made in Collabloop have the additional benefit of appearing in real time to all contributors, which improves the efficiency of reaching the goal of a finished master document.

Consistency: Redlining helps maintain consistency and adherence to a specific style guide or formatting requirements. Reviewers can point out inconsistencies in terminology, capitalization, punctuation, or citation style, ensuring that the document follows a cohesive, professional style. This attention to consistency contributes to the document's credibility and professionalism.

Revision Tracking: Redlining provides a way to track revisions made to a document. Each change is clearly marked, allowing reviewers and the author to see the evolution of the document over time. This tracking is valuable for version control and ensuring that all feedback and edits have been addressed.

Legal and regulatory compliance: Redlining is crucial in industries where legal and regulatory compliance is essential. By marking changes and suggesting revisions, reviewers can identify potential legal risks, inaccuracies, or omissions that need to be addressed to ensure compliance. Redlining helps minimize legal and regulatory liabilities associated with the document. With ShareVault’s Collabloop, the team can generate a detailed history of every version of a document, an essential report for regulatory audits, In summary, redlining a document is important as it facilitates clear communication, revision tracking, feedback and improvement, consistency, legal compliance, and quality control. It ensures that the final document is accurate, coherent, and aligned with the desired objectives.

Start with a Secure Platform for Collaboration

In generating a critical document like a contract, the collaboration team needs a secure way to not only work on the contract document, but also to store and share a variety of confidential reference documents. While there was a time when security was provided by on-site data storage, in today’s digital world the best solution is an ultra-secure online environment, like ShareVault’s virtual data room. With ShareVault’s VDR, the redlining project leader has control over who has access to documents and what actions may be taken, as well as virtually unlimited storage for reference documents.

ShareVault: Ultra-secure Virtual Data Room Provider

A ShareVault virtual data room provides the essential security features that protect your documents and allows a project leader to grant or remove access at the click of a button. ShareVault has more than 15 years of experience working with companies that require contract redlining and secure access to confidential documents, in Finance and M&A, Law, Life Sciences, and other industries. The ShareVault support team can provide a VDR solution customized to an organization’s unique needs, then back it up with 24/7/365 tech support.

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