Living Document

What is a Living Document?

A living document is an electronic document a business continually revises and updates. Unlike traditional documents, which are created and finalized in one instance, living documents reflect the current state of a business, contract, or project.

Examples of living documents include:

• Business plans
• Contracts and agreements
• Policy and procedure manuals
• Employee handbooks
• Project plans and reports
• Sales playbooks
• Technical documentation

Regardless of whether someone actually modifies a living document, the point is they could do so easily if necessary. That’s why we characterize a living document by its interactivity and autonomy. With document automation software, you can initiate new activities, collaborate in the cloud, operate independently, and integrate your documents into wider automation frameworks.

To understand living documents in this light, consider PDFs as a counterexample. While you can edit a PDF file with Adobe or a Figma plugin, its contents are essentially static — they only serve as a repository and aren’t readily available for editing like an interactive living document.

For instance, updating a PDF-based contract requires you to generate a fresh document. A living document eliminates the inconvenience (and generally poor user experience of PDFs) by allowing authorized users to repurpose its content as needed or according to their procedural requirements.

Synonyms

• Dynamic document
• Evergreen document

How Living Documents are Used in Business

Businesses frequently turn to living documents to keep critical information up-to-date and readily accessible.

Project plans serve as a prime example; teams continuously refine them to reflect current project statuses, upcoming milestones, and shifting deadlines. Continuous updates to the original document ensure everyone involved in the project has the latest information at their fingertips. That way, their expectations, project decisions, and communication are accurately informed.

Here are a few more examples of how businesses use living documents:

Sales Playbooks

Sales teams use sales playbooks to guide their approach to selling product or service. This living document outlines the company’s sales processes, strategies, and goals to ensure consistency and effectiveness among team members. With a living document, sales teams can easily update playbooks as new information becomes available or adapt them for different products or markets.

Employee Handbooks

Employee handbooks — especially in fast-paced industries — need regular updates to stay relevant. Instead of reprinting or redistributing static manuals, businesses use digital versions subject matter experts and authorized admins can edit in real-time. This approach guarantees that the workforce is learning and operating based on the latest standards and techniques.

Wikis

Wikis encapsulate the collective knowledge of an organization, evolving as employees contribute new insights, update procedures, and revise guidelines. They act as a central nervous system for company intelligence, where employees and company leaders can access the most current practices and data.

Company Policies

Policies within a company are not immune to change. As regulations evolve and business strategies pivot, companies update their policy documents. This ensures every employee follows the latest guidelines and the company stays compliant with any legal or industry standards.

Contracts and Legal Documents

You might not think of contracts as “living” per se because they’re legally binding (and difficult to change once signed). But today’s businesses use software that enables digital collaboration for versioning and modification, which both contracting parties may agree to. So, since there’s no guarantee they will never change and doing so is entirely possible, we consider them “living.”

How Living Documents Work

Living documents function seamlessly within a document management system through a series of steps:

1. Document generation — Authorized users develop the document using the management system’s interface, adding initial content and setting its purpose.
2. Access control and permissions — The document creator then sets access permissions. They decide who can view, edit, or delete the document.
3. Collaboration and editing — Other users, as permitted, access the document and add their inputs, making updates and edits in real-time.
4. Version control — Each time a change is made, the system automatically saves a new version of the document. This allows users to track changes over time and revert to previous versions if they have to.
5. Review and approval — Sometimes, updates require approval. In these cases, the system notifies the appropriate person to review the changes.
6. Publishing and distribution — Once updates are approved, the document is published within the system, making the revised version available to the intended audience.
7. Archiving and retention — Over time, stakeholders archive outdated versions of the document for record-keeping, while the most recent version remains active.
8. Continuous updating — The cycle continues as users make ongoing updates to keep the document current and relevant. This is the essence of a living document — it evolves and grows in response to changing conditions or new information.

It’s possible to carry this process out without document generation software, but the process is a lot more cumbersome. And, if a compliance or regulatory issue comes up, not having a living document system in place can lead to significant problems during an audit.

Characteristics of Living Documents

Dynamic

Perhaps the most crucial defining characteristic of living documents is their dynamic nature. Dynamic, in this context, refers to the document’s ability to undergo changes and modifications over time.

Unlike static documents, living documents are never truly ‘final.’ They are designed for constant evolution and adaptation, reflecting authorized contributors’ ongoing inputs and updates.

Collaborative Editing

Within document generation tools, authorized collaborators can…

• start the initial document creation process
• build out a structure
• add sections and subsections
• make comments
• suggest changes
• modify the document’s content directly

…in real-time.

Cloud-based collaboration enables remote teams to collaborate with each other without being in the same physical location. In addition to opening up new opportunities for companies to work with a global workforce and tap into diverse skill sets, this enables inside sales teams to stay in sync with their teammates and prospects.

Version Control

During contract versioning, determining which version is current and who made changes is one of the biggest issues. With living documents, the system maintains each draft’s history, making it easy to identify what changed and when. Version control doesn’t just help with auditing; it also ensures people use the most up-to-date information.

Accessibility

In the context of living documents, ‘accessibility’ means two things:

• Access from anywhere via the centralized cloud-based system
• Rules-based permissions that control who can access, view, edit or delete a document.

Admins typically control permissions. They oversee and manage document access, ensuring that only authorized collaborators are involved in the drafting process.

Regular Review

Regular reviews reinforce the dynamic and evolving nature of living documents. The review process involves routinely examining the content to ensure its relevancy, accuracy, and compliance with the latest regulations or industry standards. Periodic reviews also allow you to add new insights, update procedures, and revise guidelines.

In the system, you can schedule them periodically or set triggers for specific events (e.g., changes in regulations or significant business developments). By assigning a responsible person or team for these reviews, organizations ensure their living documents continue to provide valuable, current, and accurate information.

Flexible Structure

Document templates play a pivotal role in document creation. They offer a standardized layout that easily adapts to fit various content types, which guarantees consistency across your organization’s documents. With a standardized, plug-and-play approach, you won’t have to start from scratch every time you need to create a new SOW, sales proposal, or NDA.

But customizability extends beyond mere structural, templatized adjustments. You can tailor living documents to reflect brand-specific designs, including company fonts, color schemes, and logos. This feature reinforces brand identity and provides a cohesive visual experience for everyone interacting with the document.

Cross-Referencing

Cross-referencing enables users to link different sections or documents to seamlessly transition from one piece of content to the next.

An article discussing various marketing tactics might cross-reference an in-depth piece about social media marketing embedded elsewhere in the document. By simply clicking the cross-reference link, readers can navigate to the relevant section without having to search through the whole document.

The ability to cross-reference different sections, documents, versions, and collateral significantly enhances readability, user engagement, and the overall navigational experience. For document creators, cross-referencing can be an efficient way to manage and organize large volumes of information, providing a more structured and cohesive framework for presenting content.

Feedback Mechanism

A feedback mechanism is usually built into the document management system and can include direct commenting, highlighting sections for review, or suggesting edits.

This level of interactive feedback stimulates a collaborative culture where team members can leverage the collective intelligence of all stakeholders to continually refine and improve the document. It also enables real-time troubleshooting and efficient resolution of any issues or discrepancies that might arise.

In other words, the feedback mechanism fosters a shared responsibility for the document’s ongoing evolution and ensures its fitness for purpose.

Digital Format

Living documents primarily exist in a digital format and often come equipped with a highly intuitive, interactive builder. Unlike traditional PDF or Word formats, which are rigid and restricted in their functionality, living documents offer comprehensive editing tools and dynamic content elements.

With drag-and-drop features, users can effortlessly rearrange sections, add multimedia elements, and modify the overall layout of the document to create a more engaging and interactive experience. The digital format also simplifies the process of adding hyperlinks, embedding videos, or integrating other types of interactive content.

Document Governance

Data governance involves procedures and a plan to manage important data in a living document. With cloud-based systems, it’s easy for admins to configure rule-based access permissions, set up two-factor authentication and audit trails, and enforce security measures to protect sensitive information. 

Moreover, document governance also encompasses data privacy regulations and requirements for contract compliance. Security features like watermarks and encryption significantly reducing the risk of unauthorized access or tampering.

8 Benefits of Living Documents

1. Real-Time Updates

By providing a flexible, user-friendly platform for document creation and editing, the digital format and interactive builder of living documents facilitate seamless collaboration and real-time updates, supporting the ongoing evolution and improvement of the content.

2. Accurate and Current Information

Living documents help businesses keep their critical documentation current, accurate, and relevant. This trait is particularly beneficial in a business environment where variables often shift and new information constantly emerges.

Consider a company’s policy document. It needs an update every time your company has to comply with shifting regulations, industry standards, and internal changes. Using a traditional document, you’d have to communicate these changes to your employees and physically verify everyone is referencing the latest version. With a living document, live updates and contract versioning solve these problems.

3. Improved Collaboration

Cross-referencing, feedback, and digital formats enhance collaboration in the workspace.

For instance, a team collaborating on a project proposal can simultaneously contribute, provide comments, and reference related works. This ensures the inclusion of everyone’s ideas, prompt resolution of potential issues, and the creation of a comprehensive and cohesive final document.

During contract redlining (after the proposal is accepted), the feedback mechanism ensures both parties can send comments, suggestions, and approval notifications in real-time. This streamlines the contract negotiation process and provides a unified platform for all stakeholders to communicate effectively.

4. Transparent Documentation

Because living documents are accessible to multiple stakeholders, they promote transparency within an organization. Everyone can view the document’s progression and track changes made by different contributors, ensuring accountability and a record of document evolution.

5. Version Control and Audit Trail

Version control is a critical feature of living documents. It allows users to revert to previous versions, track changes made by multiple contributors, and have an audit trail of all edits. This not only helps in maintaining document integrity but also ensures compliance with regulatory requirements.

This becomes especially important when it comes to contract modification under ASC 606. Audit trails, version control, and documentation of contract changes ensure proper revenue recognition.

6. Cost Savings

Compared to traditional document management processes, which require you to print, distribute, and store hard copies of documents, living documents offer significant cost savings. The digital format eliminates printing costs, and cloud-based storage minimizes administrative expenses related to document management.

7. Risk Management

The dynamic nature of living documents minimizes the risk of using outdated or incorrect information. Data encryption, 2FA/MFA, and rules-based access add an additional layer of security, ensuring sensitive data is protected.

8. Strategic Alignment

Members of your deal desk, contract administration, sales, and legal team can use living documents to align their practices with the company’s strategic goals. By reducing confusion and improving efficiency in the sales, contracting, and legal processes, living documents contribute to your organization’s overall success and interdepartmental alignment.

Living Document Software

As mentioned throughout the article, today’s companies need to use software to create and manage living documents. That said, not all software is created equal.

Common living document tools include:

• Contract lifecycle management (CLM) — A platform built to help companies automate their contract management processes, store documents, and manage contract renewals.
• Configure, price, quote (CPQ) — A sales quoting and proposal generation software that streamlines the entire sales process. Advanced CPQ tools (including DealHub) include dynamic document creation and version control.
• Document automation software — These tools allow you to create quotes, proposals, NDAs, RFPs, SOWs, BOMs, and other types of documents quickly by pulling data from sources like CRM, CPQ, and ERP.
• Collaboration tools — Platforms like Slack and Microsoft Teams offer collaboration features that make it easy to share and work together on company documents. They integrate with your living document software to further enhance team collaboration.

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