In my last two columns, I have written about the importance of creating, organizing and maintaining company records. This third and final column in the series addresses the growing importance of managing your agreements and contracts.

These legal documents include licenses (including software), employee benefit plans, customer contracts, supplier agreements, salary and incentive plans and employee and contractor agreements, among others. Do you know how many copies of software are in use in your firm? Are you aware that companies have been audited for their use of software licenses? The proliferation of software from one computer to another without the corresponding licensing has become a major problem and source of liability in business.

Create a location to retain your license agreements and/or purchase documents to show that you have legal right of use. Twice each year have your accounting department count the applications in use in the company and compare the use to your purchased licenses.

Employee benefit plans, customer contracts and supplier agreements need to be organized and retained in a secure location. Talk to your accountant regarding retention requirements.

An area needing more attention is employee and contractor agreements. These agreements typically outline rights of the parties, compensation, termination policies, notification requirements, work requirements, vacation, time off and an increasingly important clause that assigns the ownership of the work product to the company.

In many industries, employees are asked to sign employment agreements. In a few cases, terminated employees have claimed ownership of work produced while they were employed by their former companies — and won in court.

If you are not currently requiring your employees to sign an agreement, ask your attorney whether you should begin the process. If you have an employee agreement, audit your files periodically to determine whether you have an agreement for each employee (including terminated employees). In addition, have your agreement reviewed annually by an attorney.

Contractor agreements are a must. Do not hire anyone without an explicit agreement covering terms of employment. Companies large and small need to be diligent in this area as evidenced by the lawsuit that Microsoft has faced with its contractors.

One company hired a contract programmer for a six-month project. The contractor agreement of several pages was complete in its coverage. On the last day of the contract, the company and the contractor parted ways, work completed. A few weeks later, the company received a claim for unemployment insurance. The company protested but lost on appeal.

Managing your agreements and contracts is critical in maintaining good customer relations and establishing a common understanding with your work force. Minimizing disputes and liabilities are goals worthy of your management attention.