Businesses rely on contracts to manage most aspects of their organizations, from buy-side contracts to employment related contracts, and documents like non-disclosure agreements. Managing these important documents though, demands a modern solution that can help maximize profit and revenue through saving time and improving visibility.
Below are six ways that modern contract management solutions can help businesses become much more efficient when managing contracts.
Searching for and Finding Contracts
One of the most time-consuming aspects of managing paper contracts manually is simply locating and sorting through the documents. Entreprenuer.com cites a statistic from the Journal of Contract Management that “71 percent of companies couldn’t find at least 10 percent of their contracts.” For Enterprise level companies, this can number in the hundreds or even thousands of contracts. Having to deal with paper contracts not only creates a great deal of tedium for those tasked with managing them, it also leads to situations where businesses may not be wholly aware of their financial obligations, and paying for overlapping services, or even violating contract terms that were forgotten about.
Storing contracts electronically in a centralized repository provides a simple, secure, and affordable solution for making sure that contracts are not lost, and allows them (and their contents) to be searched instantly.
e-Signatures have been long accepted as an authoritative tool, carrying the same legal weight as a normal or “wet” signature. e-Signatures are becoming industry standard because in addition to having all the legal authority of traditional signatures, they are a huge time-saving tool, allowing an unlimited number of individuals to sign a document at any time of day and from virtually any location.
Good contract management software typically allows documents to be delegated into a workflow system that notifies individuals automatically when their action is needed. Workflows are key to optimizing performance, and making sure that individuals accomplish tasks when they need to perform them. Contract management software will notify parties when their input is needed for collaboration and approval, and e-Signature, ensuring that time is not wasted transitioning between tasks.
Edits, Redlining, and Revisions
Editing and revising a contract can also be one of the most time-consuming stages of the contract lifecycle. To address this, contract management solutions add automation to the process. Electronic solutions track changes made to a contract with an audit trail that cannot be altered, allowing users to see who made what changes and when. This helps users stay organized, and also keeps previous document versions automatically saved in chronological order and color-coded to show who made specific changes. All versions of a document are permanently stored, even after a document has been executed, ensuring access regardless of team changes and improving compliance.
To avoid the difficulties that arise during the contract drafting process, many businesses rely on templates to speed the process along. Contract management software provides a repository where templates can be stored and used to draft new contracts in just a few seconds. With CLM, users can also begin drafting a new contract directly within the platform. Templates substantially enhance, transparency and oversight, and reduce errors in contracts and the time needed for drafting the contract.
Communicating with Vendors and Clients
- Sending follow-ups through an automated reminder system is a simple but powerful tool for ensuring that deadlines and opportunities are not missed. In times past, users relied on email to stay in contact with colleagues, vendors, and customers. Contract management software eliminates the need for emails and consolidates all communications into a single place. Additionally, it can permanently keep all your conversations in chronological order and saved with the document you’re discussing. Parties can also view discussions on executed documents from prior years should they need to provide context or prove intent in court.