Aspects of contract management include comprehending, organizing, drafting, and enforcing agreements that an organization has with customers, vendors, business partners, employees, investors, and other parties.
The contract lifecycle’s negotiation, execution, and performance phases are all covered by the contract management system, which begins even before an agreement is drafted or proposed with a term sheet.
Businesses’ handling of individual contracts, as well as the dozens or hundreds of agreements they enter into each year, are significantly impacted by contract management.
Even midsize businesses have thousands of open contracts, and each one increases the complexity to the point where it is impossible to manage without the right enabling technology. In the digital age, organizations that continue to rely heavily on spreadsheets and manual approaches suffer quantifiable losses.
Without proper data integration and integration with other systems like customer relationship management or enterprise resource planning, contract management cannot be scaled to match the required growth.
With the help of contract management software, it is possible to significantly decrease the amount of time and resources required to manage and administer all your contracts. As long as you can manage, track, and automate each step of your contract lifecycle using your digital contract management systems, it doesn’t matter how big your business is.
Keep reading this article to find out a few major benefits of contract management software.
Benefits of Contract Management Software
Contract management software is designed to completely automate your contract process. Automated workflows that can be customized speed up and increase productivity during the review process. With the help of a contract management system, you can speed up the approval process, create a dynamic workflow to-do list, and quickly scan all of your contracts to get a better sense of how things stand at your company right now. Based on the information you have collected using the contract management software, you can easily notify the concerned parties via email to remind them about the next steps or define escalation procedures.
With better content management software, there is no need to outsource document storage or take up valuable office square footage with messy filing cabinets. Team members will have access to all agreement-related documentation from a single location by scanning paper documents directly into the system using automatic image or optical character recognition. With CMS, electronic contracts of any kind can be imported, and each one’s document status and other pertinent information will be displayed.
A better contract management system aids in audit preparation. Digital contract management software offers a centralized portal with features such as audit trailers that provide access to your entire contract history with the click of a mouse.
Contract management systems help reduce the negotiation cycle. Contract negotiation is an important part of contract management. The negotiation process in the contract lifecycle creates an opportunity for organizations to arrive at beneficial terms and set the tone of their business relationships.
Contract documents are typically sent back and forth via email attachment during business negotiations until the parties reach an understanding. The process involves the stakeholders inserting, removing, and modifying contract clauses. It becomes challenging to track the negotiation status and precisely pinpoint changes when negotiations are conducted via numerous emails.
The customer management system eliminates the pain of emailing back and forth and promotes faster negotiation cycles. By using one, the contract owners can securely share contract documents by assigning appropriate access permissions for each negotiator. The counterparties can collaborate in real-time to suggest edits and add comments to the document.
Contract management systems help in the faster execution of contracts. Contract management software comes with a native e-signature solution or third-party integrations for contract execution. This allows contract owners to eliminate the email, print, sign, and fax cycles and get their contracts signed in minutes.
Closing Thoughts
The contract management system is an essential part of any organization, yet there are many organizations that continue to operate with outdated, troublesome paper-based contract management or a subpar digital version. The point of stating these benefits of the contract management system is to help you explain why you need to make the leap toward better, more systematic, and automated contract management.