contract-management Why contract management streamlines processes
Regardless of the industry, contract management is an essential part of any business. Contracts form the backbone of daily business operations and are an important risk management tool. As a company grows, so does the volume of contracts that need to be managed annually. To be efficient and enable growth, companies must be prepared to add contract management resources as needed.
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When organizations rely on manual systems, shared drives, Excel spreadsheets or other ineffective methods to manage contracts, it places a significant burden on internal teams. As the volume of contracts increases each year, so does the internal workload and costs required to manage these agreements. That’s why it’s so important for companies to implement efficient, scalable contract management as early as possible to set the stage for future growth.
Contract software provides organizations with the right foundation to scale contract management using tools that organize and automate each phase of the contract lifecycle. Below are some examples of how contract management software helps companies streamline processes:
Organization is the most important component of a good contract management process, and the main benefit of a contract management system is that it helps companies keep contracts organized and accessible. By requiring all employee:s to store documents in a central location, companies can prevent employee:s from filing documents on desktops and in email folders, which can easily lead to document loss.
Contract management systems allow documents to be easily grouped or tagged into relevant categories, often even automated with artificial intelligence. This allows employee:s to locate documents via a simple keyword search, drastically reducing the time spent manually storing and retrieving contracts.
Contract review is not just the responsibility of the legal department - each document requires input and involvement from multiple teams across the organization, including finance, sales, executive management, procurement, project management, etc. Coordinating simultaneous reviews across each team and gathering input from dozens of employees can be disastrous if not handled with an organized process - not only can it result in lost drafts and overwritten amendments, but it can double or triple the time it takes to successfully draft and negotiate a single contract.
Contract management software allows contracts to be reviewed in a single cloud-based platform that can be accessed from anywhere, while version control features prevent users from reviewing outdated contracts. This process allows for a much faster review process than one in which employees take turns emailing drafts back and forth.
Contract management software also helps standardize security procedures related to contract management. This is especially important in industries like finance and healthcare, where data security compliance is mandated and regulated. By choosing a platform that prioritizes document security, organizations can prevent external data breaches or unauthorized internal access and ensure processes are compliant at the time of audit. For added security, user role and permission settings allow organizations to control which employees can access, read, or edit a document.
Enables deadline compliance
Contract management software streamlines document renewal workflows. When teams are tasked with managing dozens or hundreds of documents, it can be easy to overlook renewals and expiration dates. But when deadlines are missed, companies run the risk of unintentionally renewing unfavorable pricing or terms and conditions, which can have serious financial consequences down the road.
Contract management systems simplify this process - by allowing companies to assign alerts and reminders to specific users well in advance of important contract deadlines. This allows teams to better coordinate their review activities in advance and ensure that important deadlines are not missed.
Contract management often receives less attention than other business processes, but its impact on profitability cannot be overstated. The financial impact of a lost contract, a missed automatic contract renewal, or a data breach can be devastating to any organization. In addition, employee hours wasted on manual contract management processes can quickly become costly.
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