For many organizations or companies out there, one of the tricky and daunting tasks is managing contracts. For example, a simple contract expiry query or the effort to find the latest contract version can hinder a transaction. To be able to overcome this challenge and maximize the efficiency of workflow, many businesses have taken to document management system or DMS. With this, progressive organizations prefer advanced contract management software to an everyday DMS, just like https://parleypro.com/.
The year 2021 is the best time to start looking at the processes of your company and search for ways to improve them. Managing contracts throughout their life cycle can be challenging. Therefore, considering to adopt to contract management software is essential. If you are wondering what a contract management software is and how it helps businesses, you’re in the right place. Today, we are giving you the different ways on how contract management software can benefit your business in 2021.
What is Contract Management?
Contract management is the method of tracking and managing contracts throughout their life cycle or life spans. It involves different activities, such as negotiations, administration, monitoring, and compliance. This is why it is also sometimes called contract life cycle management. In contract management, certain steps are followed. Here are some of them:
- Template Authoring: This is the first step in contract management. It is the process of designing the templates for contracts that a company or business will use.
- Contract Creation: The next step is to create the contract that will be used based on the template. This is a time-consuming step.
- Review of Contract: In this step, the contracts that have been created will be reviewed. It includes all the changes and corrections that should be made.
- Approval of Contact: This is the time when both parties that are involved in the contract decide whether the contract works for them. It is the signing off on the negotiated items and getting final signatures.
- Execution of Contract: This is the time when the contract terms are implemented in the contract life cycle. This is the longest step in contract management.
- Contract Performance: This step is when both parties review the performance of the contract. It is an important step to determine what they should do with future contracts.
- Expiration of Contract: This is the last step in contract management. It is where the contract will be closed out and decide if it will be renewed or ended.
How Do Contract Management Software Work?
A contract management software is any platform that supports you in moving contracts through their life cycle. Depending on what software you choose, it can help you in managing the creation, negotiations, signature, renewal, and as well as analysis of the contracts in your company. It makes it easy for your legal team to work on each step of the process as an integrated group.
There are also a lot of contract management systems that will allow you to rationalize contract administration tasks, decrease business overheads, and give a singular, focused view of each contract your company has.
Why Do You Need a Contract Management Software for Your Business in 2021?
We can say that a contract management software is essential for your business in 2021 because it gives necessary insight into contract data. Aside from that, it also enables collaboration between parties and helps in saving time and cost with insignificant risks.
Based on a report, if a contract management software is ineffective, it could cost businesses $100 billion per year in missed savings opportunities. This means that a contract management system is a better way to contract management, which is also responsible in tracking and negotiation. Finding a good software is also essential to reduce supply chain risk and ensure compliance in all the stages. With this, you need to find an advanced contract management software to achieve success with hiring, a product launch, global expansion, and other procedures.
How Contract Management Software Can Benefit Businesses
Here are some of the different ways on how your business can benefit from contract management software:
If the expiry date of a contract is unclear, it can lead to an extension of a contract. This is fine if the partnership worked out well. However, it is not desirable if either party is not satisfied. The expiration of the contract is an essential indicator to review the relationship of your business with the current supplier. A contract expiration is also for both parties to make way for a better deal. When you have a reliable contract management software, it factors in the expiration date so it can alert the user to make a decision.
Digitalization of Document
Even with the advancement of technology, there are still a lot of businesses out there that use paper. Investing in a contract management software is a great method to embrace technology, and as well as to help the environment. Digitalization of documents facilitates accessible and central examination any time. An advanced solution is not only for desktop applications as they are also accessible on mobile devices. In case of later, role-bound access to information is possible any time without the need to restructure your binders every few years.
Authoring of Contract
If your business has an advanced contract management software in place, authoring of contracts can become easy. It can also help avoid repetition, as contracts of similar terms, conditions, and legalese can be a template for repeat use. It also helps you skip the redundancy of contract-drafting multiple times by using standard template that is pre-approved by your legal team and editorial board. With this, it’s as if contracts write themselves and offer you enough room to pay attention on other strategic matters of your business.
A contract management software also has the facility of automated invoice processing. With this, you can match a purchase invoice easily to contractual agreements. The best thing about this is that you do not need to encrypt a recurring invoice manually as it will automatically extract payment conditions for the contract.
It means that with a contract management software, there’s no need for manual involvement if installment and contractual specifics are a match. Aside from that, you can also use it to easily track the quantity of invoices for a certain contract and prevent fraudulent transactions for all in-valid contracts.
Evaluation of Performance
A contract management software can also help you with the insight needed to evaluate your supplier-performance. As a business or organization, you will have a standard contract procedure to measure supplier-performance. This will help you decide whether or not you can continue with a specific supplier. In addition, it can also help your business in rewarding the best supplier and put in effort to nourishing a long-term money-making relationship.
Since 2021 is here, there are lots of things and expectations that businesses need to fulfill to acquire new clients and as well as sustain existing ones. With the advancement in technology, having a contract management software is only a little thing you can have but can help a lot. Contract management software offers companies and businesses too many benefits, making it difficult to resist. It can help cut down a lot of the annoying parts of the process.
Aside from that, it is also essential for organizations to improve their contract management system as early as possible. It’s because, later on, it can be too late to understand the nuances of an advanced system when the world would be taking out maximum value already. We hope the information we shared here helped you in further understanding how contract management software can benefit your business in 2021.