In the past, contract management was straightforward whereby, several stakeholders came together to discuss the concerns and obligations of each side and determine a set of guidelines both parties would abide by. Should expectations fail to match, each party returned to the contract and deliberated on the unfulfilling portions.
Currently, the complexity of contracts has rapidly increased with online contract agreements collaborating across multiple streaming platforms. Contract management software plays a key responsibility in contract creation, negotiation, and execution processes which must be transparent, clear, and straightforward.
Benefits of contract management software
Characteristically, companies invest in contract management software after reaching a particular growth stage to prevent volumes of contracts from spiraling out of hand. However, it is advisable to begin as soon as possible to avoid workflow mix-ups from manual.
Below are some advantages of contract management software
Auditing
The contract management lifecycle has a dashboard that allows viewing the entire contracting process and has tracking capabilities that track useful information for auditing purposes. Also, tracking makes it easy to identify errors and make appropriate adjustments.
Risk management
Typically, contracts have hidden risks within the text, ranging from ambiguous terms to misspelled words or unapproved phrases. With a contract management system in place, it will help mitigate risks with pre-approved clauses, contract audits, and contract portfolios.
Automated workflows and alerts significantly improve compliance, ensuring users never miss deadlines, milestones, or important obligations.
Time management
Many professionals do admit that they lose plenty of time while handling repetitive tasks. Workflows need automation to reduce time spent on manual processes. For instance, utilizing a pre-approved template will enable you to create a contract draft faster with minimal effort. Also, communication occurs in one shared platform where teams collaborate on negotiations, amendments, and data input. One main advantage of this is that there are no back and forth emails.
With contract management software having the ability to integrate electronic signatures, there is no need to sign, scan and send them back.
Minimizing expenditure
The process of reviewing and managing contracts remains an expensive affair. However, with an appropriate contract management software, the cost significantly reduces since automating the process saves time, increases productivity, and ultimately reduces operating costs.
Improving efficiency
Companies using manual systems have a hard time storing documents in filing cabinets, forcing teams to spend a lot of time finding relevant contract templates. In addition, collaborating teams cannot view each other’s records in real-time, a process that wastes a lot of time when stakeholders need to discuss and negotiate on a contract. Sending documents back and forth presents security challenges while dealing with sensitive information.
Using a contract management lifecycle enables every relevant party to log in and view amended contracts, as long as they have permission to access the portal. Furthermore, with digital contract management software, companies no longer rely on filing cabinets since employees can access information from the cloud, from any remote location.
Business growth
Contract management software solutions minimize the amount of time spent on repetitive tasks by automating processes in the entire lifecycle of the contract. As your business grows, so does your contract volume. With the addition of contract agreements to manage, you need a software solution to work your growth without requiring you to purchase additional expensive machinery.
Optimizes finances
Contract management software eliminates unplanned auto-renewals of unwanted services or ending contracts that you want to terminate. Stopping auto-renewals from unwanted sources helps reduce legal fees and contract management costs.
Automation permits users to analyze costs and how finances are spent while ensuring they obtain the best value for money. In some instances, such as healthcare or construction, contracts need to be well defined. The contracting process for these sectors requires legal expertise and additional time to create contract agreements. Therefore, contract managers need to charge more for the extra time spent.
Security
Storing documents in multiple shared folders is disorderly and highly insecure as anyone can easily access sensitive documents. Using standard storage systems like Google Drives is easily accessible to anyone with access to files.
Contract management has capabilities that allow access privileges to only those with access permission to sensitive documents. While individuals may have access rights to a portal, they still need a password to open a document. Unlike general cloud storage services, contract management software offers additional security, ensuring that only authorized individuals can read that document.
Better collaboration
The contract management system makes the daily contractual tasks more accessible to each supplier, customer, partner, or employee from the centralized repository. Both internal and external stakeholders can access and retrieve contract documentation from any remote location.
Summary
Contract management software can minimize contract approval time and increase efficiency and productivity in an organization. A lost or misplaced contract can pose a considerable risk for a company. Therefore, you need to invest in software that will help you efficiently store and manage contracts.
