Regardless of the industry, contract management is an essential component of business operations. Contracts serve as the backbone of day-to-day business functions and are an important tool for managing risk. As a business grows, so does the volume of contracts it must manage on annual basis. In order to be efficient and enable growth, businesses must be prepared to scale contract management resources as needed.
When businesses turn to manual systems, shared drives, spreadsheets, or other ineffective methods for managing contracts, a significant amount of stress is placed on internal teams. As contract volume compounds annually, so does the internal workload and the cost required to manage these agreements. This is why it's so important for businesses to implement an efficient, scalable contract management process as early as possible as it can only help to set the stage for future growth.
Contract software provides companies with the right foundation to scale contract management overtime through tools that bring organization and automation to every stage of the contract lifecycle. Below are a few of the ways contract management software helps businesses streamline processes:
Organization is the most important component of a good contract management process and contract software's primary benefit is helping companies keep contracts organized and accessible. By requiring all employees to store documents in a centralized location, companies can prevent employees from storing documents on desktops and in email folders which can easily lead to lost documents.
Contract platforms allow for easy grouping or labeling of documents into relevant categories (some platforms even do this automatically with artificial intelligence). This makes it so employees can locate documents through a simple keyword search, which drastically reduces the amount of time spent manually storing and retrieving contracts.
Reviewing contracts isn't solely the responsibility of the legal department - every document requires input and oversight from several teams across the organization, including finance, sales, business development, procurement, and project management. Coordinating simultaneous reviews across each team and collecting input from dozens of employees can be disastrous if not managed with an organized process - not only can it result in lost drafts and overwritten edits, but it can double or triple the time it takes to successfully create and negotiate a single contract.
Contract software allows contract reviews to take place in a single cloud-based platform accessible from any location, while version control tools prevent users from reviewing outdated contracts. This process creates a much faster review process than one where employees take turns emailing drafts back and forth.
Contract software also helps to streamline safety and security procedures related to contract management. This is especially important in industries like financial services and healthcare where adhering to data security is mandatory and regulated. By choosing a platform that prioritizes document safety, companies can prevent external data breaches or unauthorized internal access and also ensure processes are compliant come audit time.
It's important to note the level safety and security can vary depending on the software provider. Companies should consider platforms that are SOC2 certified and hosted on secure servers. Cloud-based platforms should conduct frequent vulnerability testing and implement malware protection to help keep documents protected from cyber security threats. For extra security, look for a platform that has user role and permission settings, which gives companies control over which employees can access, read, or edit a document
Facilitates The Renewal Process
Contract software streamlines document renewal workflows. When teams are tasked with managing dozens or hundreds of documents, it's easy for renewals and expiration dates to slip through the cracks. However, when dates are missed, businesses run the risk of unintentionally renewing unfavorable pricing or business terms which can have severe financial consequences down the line.
Contract software makes this process easier - by allowing companies to assign specific users alerts and reminders well in advance of key contract dates, teams can better coordinate review activities well ahead of time and ensure key dates are never missed.
Supports Other Business Processes
Contract management often feeds into several other areas of the business and software can help bridge the gaps between document management and other downstream business processes such as customer success or vendor management. Finding a contract platform that "plays nice" with other business-critical applications, such as your e-sign platform or CRM, can help drive efficiency to other areas of your business as well.
Contract management is often given less attention than other business operations, but it's impact on profitability cannot be overstated. The financial consequences associated with one lost contract, missed auto renewal, or data breach can have a devastating impact on any business. Additionally, the employee hours wasted on manual contract management processes can quickly become expensive.
By streamlining processes associated with contract management, your business can be prepared for long term growth. If you're looking for a full lifecycle platform that can simplify document storage, provide state-of-art security, and streamline productivity, try a free trial of ContractSafe today.