Any business owner appreciates the importance of a contract since agreements govern every aspect of the business process. Think of the different ways your business interacts with shareholders and other companies. From your customers, employees, and suppliers, all these associations start with a contract.
Those are far too many contracts, and tracking every single one of them is crucial if you are to escape legal lawsuits. Notably, even in a small organization, you’re going to need assistance from a contract management software.
Whether small or big, every business needs a contract management system due to contracts’ sensitive nature. No matter how organized your team is, it is always wise to back up everything electronically for later reference.
Different aspects of contract management software
There are specific functions of contract management software that your company can find helpful:
- Contract lifecycle management software E-signature software
- Contract management software
- Contract analytics software
Contract management software can generate, negotiate, sign, renew and integrate data on contract agreements. It allows teams to work more efficiently by minimizing time spent on business processes. With various available ready-made templates and clauses, it is possible to easily create contracts using information including location, price, or products. Therefore, contract management software automates, tracks, and monitors business contracts.
Contract lifecycle management software (CLM) can automate and streamline contract processes during key contract stages, including initiation and authoring. It entails the management of a company’s contracts from start to finish ensuring effective monitoring is maintained.
E-signature software enables users to append signatures on soft copy documents. Cloud-based solutions allow multiple users to sign from diverse locations, while desktop-based tools enable editing and electronic signing from laptops.
Contract analytic software integrates artificial intelligence and machine learning projects capabilities, enabling organizations to critically and effectively analyze contracts. The software offers insights into contract statistics to help maintain consistency.
Organizations heavily rely on terms and conditions within contracts to conduct daily business processes that include income generation and revenue collection. A poorly generated, implemented, or managed contract can drive an organization to massive losses in missed opportunities, technicalities, and compliance. Notably, any business must take a keen interest in its contractual obligations to ensure business growth.
Each business should consider creating a legal department within the company. Additionally, employees should be familiar with contract agreements noting renewal and termination dates,
Stages of contract management
Planning
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The first stage of the new contract management business process is the planning stage. The planning stage is the brainstorming phase that allows for foresight without backtracking once the process begins. Since you intend to enter a variety of contract agreements, you need a flexible contract management strategy. You may find it beneficial to integrate different processes for different kinds of contracts.
Some key factors contract managers should consider while selecting a contract management software include:
- Type of contracts you manage
- Nature of agreements
- Duties and responsibilities for each stage and specific individuals to handle the process
- Challenges and their solutions
- Investment or resources to ensure success
Auditing
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The best way to pinpoint challenges and address them is to carry out a comprehensive audit. Future success depends on examining past and current practices with an audit, looking at every detail of how your company manages contracts from formation to execution.
If you constantly struggle with terms and conditions within a contract, you need to take note and pinpoint the issue and how you intend to address the challenge. Moving forward, ensure to examine and investigate each contract to prevent future setbacks.
Create a framework
By planning and auditing, you’ll be in a better place to understand the contract management process most effective for your business. Creating a framework at this stage will help you build a structure to use for current and future contracts. With this plan, you should effectively map out strategies and actions clearly defining roles and responsibilities for each department.
Apart from using metrics to measure success, also give and receive feedback. If the strategy isn’t agreeable with every department, make an effort to customize it for everyone’s benefit.
Selecting an appropriate technology
To ensure success in managing your contract, you need appropriate technology. Knowing a different function each software presents will make it easier for you to make a selection. Depending on your organization’s specific process, you can select customizable software to meet your particular needs. Whether you need software for contract management, analytics, contract lifecycle management, or E-signature tools, finding out what each contract management system offers will help you make a wise choice.
Summary Allowing technology to manage contracts on your behalf is not an option but a necessity to save time, improve efficiency and increase productivity. There are too many challenges that come with running a business. Dealing with contract agreement challenges shouldn’t be one of them. While some aspects need human intervention, taking advantage of contract management software will significantly reduce risk and human oversight.
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