In a world of rapid growth, it is crucial to keep yourself at pace to ensure sustainable and profitable development. Powerful teamwork with the right solutions that saves time and cost is the key to fast growth. Adopting innovative online solutions is one way to stay organized for a better workflow. Contract Management System is one such tool that makes the complex seamless.
What is a contract?
In simple words, a contract is when two or more parties assign specific terms, rights, and obligations. Both the parties should further move only abiding by these terms. If any violated one of the terms, the contract is to be brought to light again. Though these contracts haven’t changed, the processes and volume involved in them have. Managing contracts digitally will enhance your workflow and save immense time and cost.
What is Contract Management Software?
A Contract Management Software is an indispensable tool that ensures the intent of all the contracts concerning your organization is acknowledged. This software is used to manage all the tasks in a business contract such as negotiating and gathering data. It helps officials like lawyers to manage the contracts without the tedious manual work. This enables the company to engage in more work as a Contact Management System consumes less time.
So basically, a Contract Management Software is a digital way to deal with all the legal affairs related to the contract processes. It maximizes the performance of a contract by enforcing commercial terms, accelerating cash flow and time to revenue and reducing the risk of non-compliance. Its centralized data feature allows users to work on a single platform.
Cloud-Based Contract Management Software
Cloud-based Contract Management Solution uses powerful and effective SaaS solutions for contract management replacing spreadsheets and paperwork. Business entities have their unique commercial, recruiting, and procurement systems. A cloud-based solution will streamline and quicken your existing contract management processes. It provides an advanced compliance environment on a controlled and centralized platform. Users will be notified if any editing occurs. Moreover, parties to the contract can communicate in real-time through this platform without having to draft email versions of the contract. Digital signatures facilitate and ensure the completion of the agreement. You can also seamlessly control the accessibility and templates of the contract.
Why is Contract Management important?
Failure to manage Contracts on time will lead to a bad reputation for the organization in dealing with legal affairs. Not to mention the legal challenges that follow. A fine Contract Management Software replaces the manual contracting that kills the majority of the time that could be replaced for productivity. Research says that contract processes alone take up 92% of the time.
Poor communication with the opposite parties leads to an unhealthy relationship and often ends up in closing deals they had. This is a result of the confusion that occurs while dealing with contracts. Managing dates is also another challenge. In between all the hassles of running a company, always keeping up with deadlines is important. It also reduces the expensive renewal costs. Hence adopting a Contract Management Software is the best solution.
6 reasons why you should implement Contract Management Software in your business
1.Digitized Documentation
Though our world is rapidly moving towards digital solutions, some people still stick with the traditional way of paperwork. Adopting an advanced Contract Management Software is the best way to endure innovative technology for the automation of business processes. With this, anybody in the organization can remotely access and edit the documents on one platform. The latest solutions can not only be accessed from laptops but also on mobile phones. Access to files and easily editable features save a considerable amount of time from running and searching for files and papers.
2.Authorized Contracting
Advanced contract management reduces the chances of missing important documents and the repetition of documents. Repetition is a common error that occurs due to similar terms and conditions with other entities. Using one template from the legal department or the editorial board while drafting a contract will reduce the mess due to repetition. With this, you can concentrate more on your business workflow and not worry about writing contracts.
3.Contract Expiry
Uncertainty of contract expiry dates leads to an extension of the terms. It will be fine if both the parties share a healthy partnership but could end up in a mess if otherwise. The contract’s expiry date is a key factor to assess the current relationship with the present supplier. Conducting a review on the business and profit benefits both parties to bring even better deals in the future. Whilst confirming sales with them it also gives an opportunity for a decent bargain. Having a Contract Management Software helps in notifying the user regarding expiry dates.
4.Performance analysis
As an organization, it is critical to occasionally evaluate the opposite party’s performance. With a Contract Management System, you can always review whether the contract protocols are being followed or not. This review allows rethinking the deals shared with them. Thereby also helps in filtering the best dealers to ensure a long-term profitable relationship.
5.Financial Optimization
Taking up a Contract Management Software will ensure to eliminate unnecessary renewals, controls legal expenses, and review spend analysis. This improves focus on savings.
6.Classification and Searching
With the advanced features of the Contract Management Software comes the facility of enhanced searching abilities and classification features. It allows you to tag or classify the contract documents under groups such as IT, marketing, finance, etc. This is a savior from the boring and endless hunt for documents from enormous piles of papers and files.
Follow These Practices for an Effective Contract Management Process
- Make a unique and uniform set of terms and conditions for your company that generally covers a contract.
- Articulate Contract Management KPIs and be transparent about the business goals.
- Set high security and alerts. Notify the user of receiving contracts and their expiration timelines. Higher the responsiveness, healthier the business.
- Automated alerts to notify the concerning party on reviewing a certain document which reduces the chances of missing important information.
- Keeping track of finances and metrics regularly by reviewing them once in a while.
- Conducting compliance reviews will ensure the protection of a company against legal risks and industrial and external regulations.
Difficulties That Might Come Along With Contract Management
As we discussed the benefits of contract management it is also necessary to analyze and acknowledge the downside of it that follows. Let’s take a look at the challenges of Contract Management you need to be aware of.
Losing Control
One of the saddening disadvantages of Contract Management is that you will have to give a significant amount of control over the business to the opposite party. Even though you will continue to have the freedom to run the services, it is the other side who does the decision-making for the fair and smooth running of the business. It will be okay if both parties maintain a healthy relationship. But if the management company takes a harsh stand to reach the contract goals, it often ends up in a clash.
Reputation at Cost
Conducting an in-depth study of the company you’re signing the contract with is very important. No matter how pleasing they are on the outside they will have their strategies. Take a peep into their relationships with other companies, their history, client opinions, and a general reputation. Well because you never know!
Possibility of Delay
Not being able to meet the goals on the contract on time is another potential demerit. If the services are not provided within the deadline, the contracting organization loses money and time.
Dispute on Interests
Companies might have different opinions. If discussions cease to run healthily, conflicts might occur. This will awfully affect the communication and relationship between the companies. It is advisable to resolve matters as soon as possible before it gets too late with confidential matters at cost.
Why Should Young Growing Businesses Adopt Contract Management Software
Young companies often fail to implement a proper Contract management system. It is inevitable for a business to have a contract management system to ensure effective growth. As you can imagine, startups initially go through a chaotic situation considering the limited sources to overcome challenges that arise within the fast world. This is why startups tend to ignore certain inevitable elements to concentrate on the “important matters”. Contract management is one such factor that is often given less priority. Though contracts may be easy to handle in the beginning, it gets harder as the business and contracts grow. Eventually, things might start falling apart because of the lack of organization. This will enlighten the relevance of a proper management system. Here you will understand that adopting a Contract Management System saves a fair amount of cost and time than otherwise.
Why should startups invest in Contract Management?
This answer to this question is just one word: Growth! Recent surveys show that revenue can increase up to 9% with the adoption of a proper Contract Management System. This is also proof that companies not implementing Contract Management systems will have to face a fall in revenue. The percentage of growth and fall can vary as the business grows.
Having a decent contract management system will also attract investors. Portraying the professional touch on your business will develop confidence in investors.
What Are The Advantages Of Using Contract Management In Various Industries
Law Firms
Law firms are the owners of contracts. in-house legal firms take advantage of contract management software to manage their documents, contracts, and templates.
Government
Even though implementing contact management software in a large sector is expensive, it escalates contract performance and in fact, reduces loads of work and heavy costs in the future. It ensures fast and smooth working of contracts and commercial processes thereby increasing productivity.
Healthcare
Healthcare industries deal with highly important documents and strict protocols. They manage documents such as employment contracts, contracts with vendors and suppliers, and more. Meticulously managing numerous amounts of documents daily is quite challenging. A contract management software is a rescue from all the stress it causes. Contract management helps you put up with strict regulations without worry. Besides it also helps with payment contracts and compliance tracking of services.
Construction
Missing deadlines and complications due to numerous contracts running simultaneously are two major problems construction organizations face. Contract management software is the best solution to tackle this situation. On the other hand, it is nearly impossible for commercial construction companies to manually handle thousands of documents at once. Hence adopting an efficient contract management software will positively impact your cost, time, and timeline tracking.
Banking
Banking industries deal with enormous amounts of documents every day. Transactions and other banking services with business entities are arranged through contracts with strict regulations. The number of documents and processes included forces the banking industry to adopt a fully efficient contract management software. This reduces risks, increases revenue, tracks compliance, and stays updated on contracts.
Non-profits
Non-profit organizations are constantly dealing with contracts from suppliers, business partners, and government entities. In the hassles of their dream missions, contract management often becomes a pain in the neck. Organizations may not always be able to stay on the mark in following all the non-profit protocols. Contract management software helps reduce these risks and creates a smooth and organized contract lifecycle.
Small Businesses
It is, without doubt, advisable for young and growing business organizations to implement a contract management software to prevent any loss. It also leads to better opportunities and better communication with other organizations. Furthermore, it ensures you are put with deadlines as it is a matter of impression.
Ensuring Security in Contract Management Software
A company’s important contract documents security got to be confirmed as locking it in a personal locker. A proper contract management software ensures security with all the possible features like passwords, controlled accessibility, robust defenses, etc. backing up the documents will make sure they are not lost and will be of help in any future disputes.
Automate Document Management With Our Powerful Contract Management Software
Simplify document management and escalate productivity while reducing costs and risks. Introducing Aufait Technologies Cloud-based Contract Management Software powered by Microsoft 365 and SharePoint. Aufait Technologies ensures a smooth and secure Contract Lifecycle Management (CLM) by automating manual workflows concerning contract agreements. Adopting our Contract Management Software enables you to concentrate more on the company’s savings, and sales and eliminates compliance risks.