Does Your Finance Department Need Microsoft 365 Business Central Contract Management?

A contractual agreement serves as the basis for every dollar a business spends. That is why the outcomes of every contracting process are crucial to establishing fiscal management. Therefore, the finance departments require prompt and direct access to real-time contract data to refine their processes. Moreover, missed contract deadlines and milestones can put an organization at daunting financial risks.  

Hence, contract lifecycle management should involve the finance department actively. Integrating Microsoft 365 Business Central with contract management software is one quick way to achieve that. The integrated system enables the finance team to oversee the contracting process from within the Business Central platform. It helps them to make intelligent decisions regarding reducing costs and boosting revenues. In this article, we’ll discuss how Business Central contract management supports the finance team and the result. 

Why is Business Central contract management vital for finance departments? 

When companies deliberate contract management solutions, they do not go beyond the needs of the legal department. But there is a lot the finance team can contribute and benefit from contract lifecycle management. Therefore, organizations need to adopt a contracting solution that offers space for other departments too.  

Ultimately, Business Central integrated with contract management software makes it easier for the finance department to play a part in the contract lifecycle. Whether it is a sales or vendor agreement, the finance team needs to assess and authorize the financial stipulations in the document. Moreover, the comprehensive data and reports available through contracts can help the organization to optimize its financial processes.  

How does Business Central contract management assist the finance department? 

Microsoft 365 Business Central is an ERP solution that helps organizations automate business operations for sales, procurement, and finance department. Integrating the platform with contract management software leads to a centralized platform to streamline contract lifecycle management. The integrated system empowers the legal to handle contracts with support from Business Central functions.  

Apart from that, Business Central contract management also makes contract intelligence available across the organization. It reveals valuable data about costs, payments, revenue, risks, and profitable avenues. The finance department can employ this information to enhance business operations.  

• Identifying lost revenue 

An organization does not automatically profit from a beneficial agreement. They need to take steps to minimize losses and derive maximum value from business contracts. Identifying the ways in which the arrangement can erode profit margin is the first step towards that. Unfortunately, executed contracts often remain inaccessible to most departments.  

But thanks to Business Central contract management, the finance team can assess the performance of active contracts. All the contract-related documents and reports are easily available through the integrated system. Constant monitoring and evaluation will help them to identify underperforming agreements. They can ensure that the agreed-upon terms and conditions are still milking profit for the company. Thus, the finance team can utilize analysis and forecasting to enhance cash flow. 

• Cost-saving opportunities 

Contract data is a reliable source of actionable intelligence. Since all the contract-related information is stored in a single cloud-based repository, the integrated system makes it easier for the finance department to access real–time contract data anytime they need. Business Central contract management provides information on clause terms, deadlines, order lists, and payment details. It enables the finance team to identify revenue patterns and opportunities. Thus, the organization can determine cost-saving trends and make profitable decisions in the future.  

Also, all the business agreements don’t hold the same value for the organization. Business Central contract management helps the finance team to identify and stay on top of high-revenue contracts. They can thoroughly manage significant agreements to make certain that the parties derive agreed-upon value from them. Thus, with Business Central contract management, profit from contracts is a guaranteed result rather than an anomaly.  

• Boost compliance 

The finance department has a high stake in the outcome of any contractual agreement. They need direct access to the contract data to ensure compliance and financial viability. Business Central integrated with contract management software, helps to track the status of every legal document in the contract lifecycle. It empowers the finance department to stay on top of every amendment and addendum added to the contractual agreement. Thus, the invested parties always have access to the latest version of the contract. 

Incorporating the finance team in the contract lifecycle through Business Central contract management enables them to better support negotiations. They can draw efficient contractual agreements beneficial to the enterprise. Competent contracts are driven by the finance department to guarantee compliance and performance. Consequently, Business Central contract management reduces the time and risk of non-compliance.  

• Enforcing obligations

The responsibility for the post-contract phase usually rests solely on the legal departments. When scaling enterprises have numerous contractual agreements in the pipeline, it is quite challenging for the legal to manually track the obligations and stipulations. They will not be able to meet the demands of the contract and derive maximum value from their parties. 

Hence, incorporating other departments in contract lifecycle management can prove beneficial for expanding businesses. Integrating Business Central with contract management software provides the finance team with a platform to stay on top of contractual obligations. They can effortlessly set up automated notifications for significant stipulations and obligations. Thus, the finance team does not have to depend on the legal to keep track of high-value contractual clauses. It saves time and eliminates the risk of missing key terms and conditions.  

• Avoid penalties 

Preventable fines and losses are a pet peeve for any financial department. Contractual agreements are a major hazard for financial and legal liabilities. The legal department often does not have the means or expertise to protect the contracts against financial risks. That is why the finance team requires a comprehensive overview of the contract lifecycle management to prevent fiscal oversights. Fortunately, Microsoft 365 Business Central contract management allows the finance team to stay on top of the legal agreement as it progresses through the contract lifecycle. 

By staying in the loop, they can ensure that they do not fall back on vendor payments, deadlines, or fines. Missed contractual obligations may result in financial penalties. Neglected auto-renewal clauses may bind parties to unfavorable contracts, which would be detrimental to your business. Thus, by tracking and verifying costs and payments, the finance department can establish smooth financial operations.

What are the benefits of Business contract management for finance? 

The finance people have a better understanding of what works best for the organization. Business Central contract management enables finance teams to organize contract finance management effectively, preserving contract profitability. Through the integrated system, shared intelligence, and automated reminders, the finance department can keep track of payments and pricing revisions. Aggregating contract intelligence through Business Central contract management can help the organization to make informed financial decisions. Here are some of the common advantages of integrating Business Central with contract management software:

• Improve Financial Visibility 

Integrating Microsoft 365 Business Central with contract management software empowers financial systems to gain a true view of your cash flow and enhance forecasting and budgeting. It provides visibility over key contract data to clearly understand a company’s financial health. Moreover, they can validate financial information with contract data to bring efficiency and accuracy to business operations. With current and accurate data, the finance team can guarantee the validity of estimates and projections.

• Optimize Financial Performance 

The financial department is highly invested in the bottom-line performance of an organization. As contracts govern the day-to-day operations of an organization, they are a vital source of comprehensive financial data. They are driven by accurate data for efficient financial planning and forecasting. An overview of the contract lifecycle is an efficient strategy for the finance team to control outgoing and incoming cash flow. 

• Eliminate Financial Risks 

Any scope of error in the financial data can disarray the entire business planning. That is why organizations require absolute access to contract data to validate financial information. Business Central contract management incorporates the finance team into the contract lifecycle. Through the integrated system, they can utilize automated notifications to avoid penalties for missed milestones and stay on top of pricing changes. Also, by keeping watch over contract lifecycle management through the integrated system, the finance team can make sure that contract expenses do not exceed their budget.

In conclusion 

Expanding the role of the finance department in contract lifecycle management can transform the financial outcomes of contractual agreements. Microsoft 365 Business Central integrated with contract management software brings together contracting and invoicing processes to a single centralized platform. So that the finance department can improve business operations with deeper intelligence.  

The integrated system offers real-time insight into contract performance, compliance, and spending. Access to contract data empowers the financial team to make intelligent choices and better manage the incoming and outgoing cash flow. Moreover, it improves the financial department’s efficiency in contract management without the need for legal counsel's intervention. They can spot clauses that make contracts more lucrative, making success more of a repeatable process. Thus, organizations can leverage contract data to improve financial health through Business Central contract management. 

Book a live demo with our specialists and learn all about how contract management software can help your business.