Contract administration software
Contract administration software helps organizations create, negotiate, renew and manage contracts. Contract administration software is an indispensable tool for ensuring that the intent of each contract is fully realized, accelerating time-to-revenue and reducing the risk of non-compliance.
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What is contract administration software?
In the past, contract managers often kept all of their documents in physical filing cabinets and maintained lists or spreadsheets of a company’s various agreements with some important terms and dates noted. These manual and error-prone contract processes are less and less common today, thanks to contract administration software.
Manual contract administration often leads to a variety of problems. Contracts could be misfiled or taken out of the cabinet and never returned. The contract manager could leave the company after implementing a system that no longer makes sense to future managers. Audits could leave the manager with an extraordinary amount of work to do. There could be too many records to manage effectively, etc.
The heavy burden of contract administration - and the risk that purely human administration brings - has led many facilities to adopt contract administration software. These services often promise time savings for managers, long-term cost reduction, increased auditability, future stability, and risk mitigation.
Contract administration software basics
There are many different forms of contract administration software on the market today. Some are meant for sole proprietors trying to manage a few main contracts with it. Others are meant for large teams managing thousands or even millions of contracts that come with multinational companies. Not surprisingly, finance and legal departments are among the most common users of contract administration software. However, these solutions are also used in a number of other business scenarios.
Sales teams can integrate contract administration software into their CRM platform to manage contract renewals and negotiations - from manufacturing contracts to auto leases. Companies can use contract administration software in the supply chain to manage vendor and distribution agreements with vendors, or incorporate any contracts that keep inventory and retail operations running smoothly.
Any contract administration software helps departments manage agreements with third parties. A company’s HR department could integrate its HR information system (HRIS) with contract administration software to automatically manage employment contracts, terminations, and labor and benefit agreements. The use cases could go on and on. Contract administration software is useful in almost all areas of an organization.
Core functions of contract administration software
Basically, contract administration software is often about four key functions: Contracts need to be stored, key provisions need to be tracked, a system needs to be in place to find a contract based on certain criteria, and reminders about deadlines need to be generated automatically.
These core functions often define the features of the various contract administration software on the market. Nearly every system offers an extensive repository where copies of contracts are kept digitally so that the documents cannot be lost. Contract administration software often offers the ability to enter contract-related data in the form of tags and keywords so that information can be quickly located and reminders can be set to alert users to upcoming, important events. The data added to the system for tracking usually serves another purpose: it makes it easier to find specific contracts or groups of contracts that meet certain criteria.
Advantages of contract administration software
With contract administration software, you can significantly reduce the time and resources required to manage and administer all of your contracts. Whether you are a small, medium or large business, contract administration software can be used to manage, track and automate each step within your contract lifecycle.
improved data protection and security One of the challenges with managing contracts manually is that it relies heavily on paper. The problem with physical documents is that they are more susceptible to damage and loss. With contract administration software, you can store documents in the cloud, reducing the risk of loss or damage. The software also protects sensitive contract information from unauthorized access. Contract administration software includes contracts and agreements with different levels of access that allow you to specify who can access, edit, and share specific documents.
saves time Manually managing contracts is a slow and time-consuming process. It often involves face-to-face meetings, signing paper copies, sending documents back and forth, scanning and uploading them for sharing. Plus, you have to repeat the entire process every time you change the contract. With contract administration software, you save all this manual work and thus a lot of time to create, edit and sign contracts.
simplifies sharing and collaboration. Companies working remotely can consult and collaborate with team members working from home or on the road. In doing so, contract administration software provides authorized users with real-time access to the information they need. They can log in, access a contract, and collaborate with colleagues from anywhere in the world. Contract administration software also has collaboration and communication features, such as comments and document chats, that make it easy to negotiate and update terms in real time.
reduces risk and improves compliance. Issues such as unapproved terms and missed commitments can put an organization at risk. Contract administration software helps mitigate risk through pre-approved clauses and contract review capabilities. This helps improve efficiency and protects your company from non-compliance. Contract administration software also includes audit trails that allow you to view the entire contract history with just a few clicks. Authorized users can see what stage a contract is at and its status (active, pending, expired, etc.), which improves accountability and compliance.
Automated alerts for important deadlines When working with decentralized teams, there is a risk of missing deadlines. Contract administration software can capture important contract dates automatically and send reminders to the responsible party. Contract administration software is one of the best tools for streamlining remote work processes. For example, it can automatically notify managers about contracts that should be terminated or renewed.
centralize data for better visibility A common problem with using manual contract management is finding a specific contract. Contract administration software solves these problems by providing a searchable, central repository. Centralized contract administration software includes search and filtering capabilities to ensure team members can access important information anytime, anywhere. Storing all documents in a central, virtual repository increases contract transparency. It also gives you control over access to contract documents and creates a single source of truth.
Manual and paper-based processes make dqw contract management slower and less efficient. However, with reliable contract administration software, organizations can easily manage contracts even when working with decentralized teams.
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