Contract software maps the process of digitally managing contracts with customers, suppliers, partners or employees. This includes the creation, management, sharing, analysis and archiving of contracts.
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What is contract software?
Contract software is used to create, negotiate, sign, renew, manage, and analyze contract data. It helps businesses and lawyers replace manual management of physical contracts, allowing companies to handle large volumes of contracts quickly without requiring more staff.
In other words, contract software is a term used to describe various computer programs, data and instructions that streamline and digitize the management of legal agreements to make the contracting process more efficient. It also allows business departments to autonomously agree and manage routine contracts on a large scale from a centralized software through pre-defined templates of their own.
Advantages of contract software
Below are some of the key benefits of implementing contract software in organizations:
1. Facilitated collaboration
Contract software allows authorized users to work on the same contract simultaneously. It also enables them to automate manual processes. By managing many contracts at the same time, users spend less time on administrative tasks and more time on what really matters. In addition, authorized users in your organization are aware of the current status of each contract. And because all parties involved in the contract have access to the same information, there is less chance of misunderstandings about agreed terms.
2. Time saving
Manually managing contracts is a labor-intensive and time-consuming process. They need to be sent back and forth, printed, signed, scanned and uploaded for sharing. Every time you change a contract, you have to repeat the entire process. With contract software, you don’t have to deal with repetitive tasks. This software doesn’t replace you or your staff, it just helps you with the daily tasks. It stores all versions of a contract in one place and is organized in an easy-to-find format so users can quickly retrieve the most current version.
3. Increased transparency
Storing all files in a centralized, digital database improves contract visibility. For example, a single contract may go through many reviews over its lifetime, most of which involve a company’s legal department and other departments. With contract software, you can track the various aspects of the contract lifecycle so that nothing is overlooked.
4. Reduce costs
Due to opaque and inaccessible contract obligations, companies often tend to produce unnecessary expenses. When employees work in multiple locations and departments, teams can miss crucial opportunities to negotiate consistent pricing and economies of scale, which can add up to huge sums. Contract software can help organizations reduce spend and improve the efficiency of their procurement strategy. Additionally it helps reduce administrative, litigation, and operational costs by automating reminders of important deadlines and making it easier to revise contracts.
5. Minimize risks
Compliance is an ever-increasing burden for businesses today. Non-compliance can result in hefty fines and penalties, damage a company’s reputation, and risk litigation. Contract software can help companies easily understand compliance requirements, gain actionable insights, and take effective action. Modern software automates compliance and risk management tasks. It consolidates data flows and processes, provides complete data visibility, and helps track compliance activities such as regulations, policies, standards, contracts and clauses, etc. - all in one control center.
6. Increase productivity
Contract management is like any other business process: it works best when you do it right. So when you streamline contract management with software, you can ensure that everyone involved understands the terms of each agreement, that they meet deadlines, and that there’s less room for error. With contract software, everyone working on contracts can have better insight into the process. This allows them to work faster and make their workflows more efficient.
7. Improve customer relationship
Effective contract software improves customer perception. Nothing is as frustrating for customers and suppliers as not being able to find a document they need or receiving inaccurate information because the person they were talking to couldn’t access the correct version of a contract. Keeping documents in one place and making sure the right people have access to them makes a company look more organized, responsive and professional.
Who uses contract software?
Legal, sales, HR, procurement and finance teams are the main users of contract software, although each company has its own needs.
Legal teams: The legal department is typically responsible for the contract process within a company. In-house legal teams use contract software to manage their templates and create contracts on a daily basis so that their colleagues in the company can do the same.
HR teams: HR departments at larger companies typically create a large number of contracts as they are constantly hiring new employees. Since HR departments are not lawyers, they often rely on contract software to create attorney-reviewed employment contracts.
Sales teams: Sales teams avoid anything that gets in the way of closing deals. As a result, they often use contract software to quickly create contracts rather than asking legal to create contracts for them. Salespeople typically look for solutions that integrate with the CRM software they work with every day, like Salesforce.
Procurement teams: In any large company, there is usually a dedicated team that deals with the procurement or purchasing of goods and services from vendors. This, of course, includes processing vendor terms and conditions and - once contracts are signed - tracking contract deadlines. Procurement teams also often need the ability to obtain approvals from other stakeholders in other areas of the business for their contracting software.
Finance teams: Finance teams typically need visibility into contracts for a variety of reasons. They need to reconcile contracts and invoices and create accurate revenue expectations for their business. Contract software facilitates this type of visibility.
There’s no denying that investing in contract software is worth it for businesses. By minimizing manual activities in contract management processes, companies can focus on things like acquiring new customers, maintaining good business relationships, developing innovative solutions for customers, and any other areas that are necessary not only to maintain but also to grow a business.
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