From mom-and-pop shops to Fortune 500 corporations, companies of all sizes rely on contracts to protect themselves and govern every aspect of day-to-day business. Customer deliverables, vendor services, office leases - there is no escaping contract management. Yet, many businesses view the contract management lifecycle as a necessary cost center, and invest in cheap, clunky solutions or turn to manual processes in order to manage it.
What many business leaders don't realize is how costly manual or poor contract management processes can be -- especially as business grows and contract volume increases. A study by the IACCM suggests it can cost between $14,000 and $48,000 for a business to manage a single, complex contract. When you stop to consider the number employees involved in contract execution and the average time it takes to move a document through the lifecycle, it's easy to see how these costs can add-up quickly.
The good news is there are solutions that can help. Investing in good contract management software can not only reduce operational costs, it may even help you uncover new revenue opportunities. If your business is looking to improve its contract lifecycle, consider these 4 ways contract management software can help you reduce costs:
Contract management software helps teams reduce the amount of time spent on the contract lifecycle by increasing efficiency and automation. How many of your employees are involved in the execution of a single contract? Legal, procurement, finance, sales, management? The list goes on and on. If your contracts are not accessible and organized, your teams are likely wasting time searching for documents and juggling multiple versions. Not only is this risky, it’s time consuming. Consider the time it takes to locate a document multiplied by the number of employees involved in the review process multiplied by the number of contracts your organization reviews on an annual basis. You can see how quickly the time adds-up.
Good contract management software solves this problem by helping to automate contract storage and organization. By leveraging a centralized, cloud-based contract repository with effective search and filter capabilities, teams can quickly locate documents they need. As an example, ContractSafe’s platform is equipped with Optical Character Recognition (OCR) technology, which makes scanned documents searchable, as well as [AI]ssistant which automates the storage and categorization of your documents. The end result - less time spent searching and sorting for documents.
By digitally storing contracts in a safe, secure location, you can also eliminate the need for on-site document storage space. You also won’t need to worry about any third party security solutions, as your documents will be safe and secure with a solution like ContractSafe.
Contract management software increases the efficiency of your entire contract lifecycle (from creation through execution). This improvement in operational efficiency ultimately allows businesses to execute more contracts. Having the ability to move contracts through your organization allows you to onboard more clients (more revenue) or implement business critical products or services that have a meaningful impact on your bottom line (reduce costs). Instead of having to wait on a “slow legal queue”, you can keep your business operating efficiently while reducing costs and driving better business outcomes.
Contract velocity is ultimately increased by enabling different teams to collaborate on contract management. By allowing easy, yet secure access, document reviews can be turned around much more quickly. Additionally, solutions like ContractSafe can easily integrate with other third party platforms that support your lifecycle, such as DocuSign or Salesforce, which can allow for faster contract execution.
Contract management software helps businesses reduce costs by avoiding the auto renewal of unfavorable contract terms or pricing. Evergreen clauses can be costly problems for businesses who do not have a handle on contract management. Manually managing a calendar of hundreds or thousands of renewal dates can make it easy for things to slip through the tracks.
Contract management software provides an easy way to keep teams ahead of key contract dates. By setting customizable alerts and reminders, you can be sure legal, procurement, sales, and finance are all alerted well in advacnce of auto renewal dates, so that performance can be evaluated and contracts can be cancelled or renegotiated. By helping teams stay ahead of unfavorable, auto renewing agreements contract management software can save you thousands in the long run.
When teams manage contracts in silos, a wide range of significant issues can arise. Finance teams may not receive final versions of contracts, which can result in billing errors. Project managers may not receive the finalized project specs, or management could lose sight of various service providers.
Contract management software not only enables collaboration, but it also increases enterprise-wide visibility into contract statuses, vendors, and performance. ContractSafe offers versioning control tools and a systematic folder and labeling system that helps ensure everyone can access the most recent version of a contract. By keeping all teams on the same page, it's much easier to avoid mistakes and reduce costs.
Managing contracts is expensive, so investing in contract management software that is affordable and helps to reduce costs can save your company big in the long run. If you’re looking for a new contract management software solution, try a demo of ContractSafe today. Our platform is cost-effective and has all the tools needed to help your business save time and money.