The Benefits of a Contract Management System are the language that everyone in business speaks. Almost every dollar that comes into or goes out of an organization is based on a contract, even if it comes from a vending machine. Because of this, businesses of all sizes are moving toward software for managing contracts. These systems make it easy to ask for, get approval for, and keep track of contracts. They can also do a lot more to make an organization more efficient, strengthen business relationships, and protect its interests.
When someone says “contract management,” they might be talking about a lot of different things. Some businesses use a folder in a desk drawer to keep track of contracts. For some teams, it’s just one person who is in charge of a spreadsheet and tries to keep up with changes. When people say “contract management system,” they mean one thing: a computer program that helps manage contracts digitally (CLM).
Companies are speeding up the review and approval of contracts now that they have a Benefits of a Contract Management System in place. They are also lowering their risk and making sure they are following the rules. They use advanced document management to get the information they need when they need it. CLMs are making it easier for everyone in their company to see the information. This, in turn, makes it possible to find the best ways to negotiate renewals and, sometimes, cut costs. It also gives them the right tools for protecting their most important assets at the enterprise level.
Here are 6 Big Benefits of a Contract Management System;
1. Speeding up the review and execution of contracts
The Benefits of a Contract Management System have automated very complicated approval routes so that the whole process of making a contract takes less time. This can include a mix of parallel and conditional approvals, which makes it easier for departments to work together.
To speed up the process and make it better, you can use email and text messages to send e-signatures to approvers and make sure they have everything they need. To make proposals and agreements, many companies take things to the next level by integrating their contract management system with enterprise software like Salesforce.
Some organizations’ delays start before review and approval cycles when the Benefits of a Contract Management System are being made. For these companies, contract management software can make available templates, standard terms, and clause libraries chosen by legal and recommend for specific use cases.
The person on the team who requests the contract has the option to set up all the customized fields, such as the type of contract, the team, the priority level, and anything else that is unique to their business. Then, when the Benefits of a Contract Management System request goes through the company’s review and approval cycles, it already has all the information that is needed. The experience is much better, and the agreement is carried out on time.
2. Making it easier to see contracts with a single source of truth
The Benefits of a Contract Management System can be done with a desk drawer or a spreadsheet, but contract management software is an enterprise-level solution that anyone with access can use. This means that more team members can start contract requests and check on how their agreement is coming along. This lets teams that use the contract management software see suppliers, prices, and their contractual obligations. This gives them more power in negotiations.
Some companies also choose to make it easier for their suppliers and customers to see what contracts they have with them. This lets their business partners see the contract, which is the most important part of their business relationship. With built-in reminders for vendors to fill out forms and keep their promises, they speed up the pre-qualification and onboarding of suppliers.
Some organizations go one step further and say that their contracts are the only place where transactional truth can be found. By taking data from their Benefits of a Contract Management System and organizing it, they can use it to guide their other business activities and keep better track of their key performance indicators.
3. Negotiate Better Renewals in Less Time
The Benefits of a Contract Management System software can automatically figure out when a contract’s renewal date is and send a reminder to the contract owner or legal team when the contract is about to end. The first step is to find out when this renewal will happen.
The software will also keep track of the contract’s terms and obligations, as well as any other Benefits of a Contract Management System with the same party that is related. If the contract is with a supplier, this can help when negotiating rates for future contracts, which could help cut costs. It can also help with performance discussions and building future KPI measures into the next set of work statements.
You can have the software report on performance obligations, contract end dates, and contract renewals. It can also help with accurate billing, spending, and actions to take to maximize revenue. On the sell side of a company, an email alert that a contract is about to renew soon lets the team make sure that all obligations are met and that the client or customer is happy.
4. Lower business risk and get better at following the rules
Software for managing contracts cuts down on three main types of risk. Compliance management with a full audit trail is the first way in which risk is reduced. The Benefits of a Contract Management System software does the work for you so you don’t have to look through your email for an approval or attachment you forgot to send. When everything is automated, each action and signature is saved digitally, and an audit report can be made with just a few clicks.
Contract compliance is the second type. The software has the ability to analyze how well your business relationships are doing. These reports can show how well the supplier is following their service level agreements and how well they are following the rules.
The last way that contract templates and clause libraries reduce risk is in the last area we talked about. Companies have more control over how they do business when they can make sure that contracts meet corporate standards.
5. Making it easier to see contracts with a single source of truth
The Benefits of a Contract Management System can be done with a desk drawer or a spreadsheet, but contract management software is an enterprise-level solution that anyone with access can use. This means that more team members can start contract requests and check on how their agreement is coming along. This lets teams that use the contract management software see suppliers, prices, and their contractual obligations. This gives them more power in negotiations.
Some companies also choose to make it easier for their suppliers and customers to see what contracts they have with them. This lets their business partners see the Benefits of a Contract Management System, which is the most important part of their business relationship. With built-in reminders for vendors to fill out forms and keep their promises, they speed up the pre-qualification and onboarding of suppliers.
Some organizations go one step further and say that their contracts are the only place where transactional truth can be found. By taking data from their contracts and organizing it, they can use it to guide their other business activities and keep better track of their key performance indicators.
6. Value-added Document Management
If your filing Benefits of a Contract Management System is better, you will be able to find the information you need when you need it. A contract management system makes it easy to find the right word or number, no matter where it is in the business. It doesn’t matter if that file is in PDF or JPG format.
The contract management system turns it into text that can be searched and can be accessed from a desktop computer or a mobile device at any time and from anywhere.
