Learn about the advantages of contract management software, how to use it, and what to expect from an automated contract lifecycle workflow.
Give your organization the support it needs with contract management software, capable of powerfully storing and sorting all of your previous and current contracts. Contract managers and business owners can be empowered with a software-supported approach to overseeing numerous contract lifecycles, inclusive of electronic signature and business integrations on a centralized platform.
Companies view contracts as what bridges the gap between the potential for a business partnership and the reality of one. A common pitfall among companies managing contracts today is how they commonly forget about their agreements post-execution. Contracts should be appropriately managed following execution to ensure that parties are fulfilling deliverables, obligations, and are maintaining compliance. And throughout the lifespan of a contract, the contract is shared between several stakeholders and departments. Contract management software helps maintain visibility and transparency over where in the contract lifecycle your document is and how the contract is performing.
Cloud-based contract solutions offer secure digital repositories so that authorized users can retrieve exact contracts, clauses, and terms at the times they need them most with text-based search and customizable filters. Contract management software provides users with contract template libraries and clause libraries with standardized templates and clauses that are preapproved by your legal team, allowing for quick and compliant contract drafting and editing in the case of a negotiation.
Want to remove some of the stress on your legal department’s back? This is entirely possible with contract management software. One of the major advantages of adopting a contract management software is how it removes many of the common bottlenecks within the contract lifecycle. Give your teams a well-organized approach to contract lifecycle management that reduces the need to resort to legal for your compliance and contract content-related questions. Expedite authoring, reviews, and contract execution with accuracy and precision to shorten the lifespan of your contract lifecycles. Legal will also be empowered to retrieve exact contracts, clauses, and key terms, as well as track and monitor agreements based on filterable contract characteristics.
One of the biggest timewasters pertains to the trouble of finding a particular contract within your contract storage system. Centralized contract storage helps legal save time so they can get the documents they need immediately. Integrating with solutions like Teams and DocuSign allow you to automate several processes and remove some of the low-level contract tasks that legal would previously take care of. The increased risk management and visibility provided by your software allow for decreased turnaround times and shorter contract lifecycles so that you can maintain higher volumes of complex contracts and ensure compliance every time.
Now, legal will have the most secure and organized systems in place that optimize contract reviews, negotiations, approvals, and other processes where their legal knowledge is used.
Configuring automated reminders is one of the most risk-mitigative best practices in contract management. Letting an unwanted autorenewal slip through the cracks means you have to stay locked-in for yet another contract term and fall victim to another phase of an unfavorable agreement, and this phenomenon is an extremely common source of contract revenue leakage in businesses today. However, autorenewal reminders can help your team maintain awareness of your key dates so they can cancel contracts with enough time in advance. A forgotten contract deadline can potentially result in extreme financial repercussions and even reputational damage to your business – both of which are completely preventable.
Give yourself enough time to prepare for the best possible deals and renew agreements according to your own timeline, needs, and business objectives. With enough time in advance, your legal department can conduct comprehensive contract reviews to effectively prepare for contracts set-up for autorenewal. Boosting awareness of contract deadlines and key dates organization-wide minimizes the discrepancies involved in manual contract tracking. This might look like one of your employees manually keying-in an incorrect contract due date, and then forgetting to configure an automated reminder to keep teams aware and involved. Automated reminders of expiries, autorenewals, contract obligations, and other time-sensitive contract responsibilities creates standardization within your organization’s contract management processes. All in all, this utility is excellent for mitigating risk, maintaining a proactive atmosphere surrounding your contracts, and providing all of your teams piece of mind that contract milestones, due dates, expiries, autorenewals, and other time-sensitive contract obligations will never slip through the cracks again.
So, what is required for a contract to be considered valid in a court of law?
Let’s take a look at the following requirements:
Offer: Contracts all start with an offer that outlines all of the obligations, terms, and responsibilities of the contracted parties along with what service or product is promised for exchange. It is important to note that prior to acceptance of an offer that the offer can be terminated or changed.
Acceptance: The recipient of the offer will now choose to accept or reject, and in the scenario they choose to accept, they will do so either verbally or in writing.
Awareness of the signer: To be considered legally valid, parties to contracts must have complete awareness and intention to enter into a contracted agreement. Parties must be able to understand a contract exists in the first place and then agree to its legally binding terms and obligations.
Consideration: An agreed-upon value in the form of an action, service, item, property, etc. is what the concept of contract consideration pertains to. Contrary to popular belief, contract consideration does not have to include an item of monetary value. Agreeing to an exchange of the agreed value is sufficient for consideration.
Capacity: Signers must possess cognitive capacity to enter into a contract, meaning they will not unwillingly or unintentionally sign away their rights. Before a signer signs off on a contract, they should be able to understand contracted responsibilities, contract terms, and potential repercussions per contract law.
Legality: Contracts must adhere to various regulations and federal, state, and local laws of their jurisdiction. Failure to comply with contract law will invalidate the contract.
A cloud-based contract repository offers security and accessibility to your entire team. Contract repositories centralize your sensitive contract data, providing a single source of truth for your team to refer to and retrieve documents, as well as a place to obtain contract data so they generate and share custom contract reports within the organization. In addition, you increase ease of access for relevant stakeholders and authorized users, where contracts are instantly retrievable from the cloud repository at any time, any place, on any digital device.
Rapidly sift through hundreds of thousands of contract documents and pieces of metadata with filters that users can customize and save for repeated use on their most commonly accessed contract types. Contract repositories boost the visibility of your commercial business partnerships with third parties, allowing you to glean maximum insights from your contract compliance rates and spend data. The support of a contract repository allows users to minimize administrative tasks as well as the human errors associated with manual data entry. These digital powerhouses also offer version control capabilities, ensuring users are only working on the most recently updated contract drafts included in the automated workflow.
Wanting to scale your business? Say no more, because a cloud-secure contract repository is perfect for business scalability. Configure reusable audit trails to streamline the auditing process and reduce response times of your audits. With data encryption both in transit and at rest, you ensure that all of your sensitive contract data is well-protected. Permissions-based and role-based access control features also keep your contract secure from unauthorized users, and this can significantly reduce the possibility of a potential data breach.
SharePoint and Microsoft Teams are perfect for contract lifecycle management. In SharePoint, you can automate contract drafting with customizable questionnaires, preapproved contract templates and clause libraries, and auto population of relevant metadata. Specific entry fields will be added to a contract draft according to questionnaire answers, and this is an excellent example of how SharePoint contract automation can increase standardization and mitigate risk in your contract drafting process. In your SharePoint, you can work on contracts in sync with other users in a dynamic co-authoring environment. To ensure that versions are correctly controlled, utilize the SharePoint file check-in and out feature, this will also reduce the possibility for miscommunication and content duplication.
In Microsoft Teams, you can take your contracts mobile with the Teams app. Teams also provides unique file sharing features so that users can download and upload different file formats into the company’s digital repository. Need to schedule a meeting with your team or relevant stakeholders to discuss a contract? Then leverage the Teams Meeting Scheduler integrated with Microsoft Exchange. Now, any scheduled meeting will be visible in Teams and Outlook. Needing to find something from your message threads and file folders in your Teams? You can easily find what you need with the Teams Search Bar. For more robust contract management, Teams offers the ability to integrate with Power BI, Word, Planner, Yammer, and so much more – meaning you’ll get the most from your Office 365 investment. Teams also provides communication Channels so you can communicate with custom-built teams in an organized manner.
There are several factors that determine the pricing of a contract management software solution. Namely, the number of users, integrations offered, amount of storage, security capabilities, and included features will influence the cost. Keep in mind the size of your organization’s current contract portfolio and future scalability. For example, a smaller business with a smaller contract portfolio will likely not require an expansive amount of storage space to hold their company’s contracts. This business will also more than likely only need a solution with a basic set of features and integrations, and this means the contract management system they select will probably be less expensive in comparison to other options built for enterprise-level organizations.
Some solutions, including ours here at Dock, do not charge extra per user. Many of the contract management systems currently available do base their pricing on how many people will need access to the system, and in this way, many enterprises leverage systems that are higher in costs. Costs per month are another fee to keep in mind when making your selection. Software solutions including sought-after integrations like Salesforce, Power BI, and DocuSign will additionally add to the potential cost. So oftentimes the more integrations included, the higher the price.
The features offered by the contract management software will most certainly impact the system’s price. For example, contract automation is a feature typically looked for by enterprise companies so they can automate contract workflows and streamline approvals, contract drafting, negotiations, and reviews – all of which supports standardization of the contract lifecycle. User-friendly redlining capabilities are another example, where users can track changes, write comments, and redline content in their drafts to optimize reviews.
Contract management software optimizes the most critical phases of the contract lifecycle: contract negotiations and approvals.
Let’s take a look at negotiations.
Version controls help users ensure that current versions of their contracts are being used, eliminating the need to sort through emails and other communications to find different contract drafts. You’ll also be able to review the detailed, timestamped history of each contract and your archived contract versions, all of which are stored in your secure contract repository. Optimized and automated contract authoring also supports your contract negotiations by ensuring that proper legal language and preapproved terms and clauses are included within your documents. This cuts down on the need for your legal team to manually read and review your contracts. Preapproved contract clauses and templates are essential to creating accurate contract from the get-go, meaning your first drafts will require less and less editing so that they are better prepared for negotiations. Audit trails are phenomenal for gaining increased insights onto the history of each contract draft, and this allows you to assess contract compliance in the context of security regulations and internal/external compliance standards.
Now, for approvals.
Contract complexity largely determines the length of the approval phase. The approval phase in of the contract lifecycle commonly takes anywhere between seven to 16 weeks long. And remember… time is money. At this rate and within this span of weeks, the service promised in the contract could have already been provided. Certainly, approvals will take an appropriate amount of time to confirm compliance and accuracy, but there’s no need for them to last longer than necessary. During the approval phase, all communication regarding the contract at hand should be timely, and with a contract management system, you can centralize all communications.
Investing in contract management software saves you money in the long run. By increasing the efficiency of your contract lifecycles via contract automation, you cut down on risks, lifespan of contract lifecycles, turnaround times, and avoidable bottlenecks. With contract automation, you standardize the sequence of actions required in the lifecycle, routing documents to the correct stakeholders at the right times within your organization to reduce delays. You’ll save so much time (which can equate to money) with easy search and retrieval of your contracts.
By shortening contract lifespans, from the time that contracts are requested all the way to expiry, you’ll be able to create more contracts and close more deals in the same amount of time. Faster contract lifecycles result in increased savings and business efficiency. A collaborative user-friendly software platform will influence the length of contract lifecycles, and automation of the various actions involved within the lifecycle help to streamline and expedite turnaround times and the lifecycle overall. Integrations like DocuSign, Adobe Sign, Sertifi, and Microsoft Teams support faster contract lifecycles.
We’d mentioned it earlier, but forgetting about autorenewing contracts is one of the biggest (and most preventable ways) to lose money. Manage your autorenewals like a pro with proactive contract management software and automated reminders that keep your teams in the loop at all times. Integrate all of your deadlines and key dates for expiries, milestones, obligations, and other time-sensitive contract activities in your digital calendar with built-in filters.
Forrester has noted that implementing an electronic signature integration has the potential to cut down manual errors at an 80% average. Here at Dock, contract signing and execution becomes standardized, simple, secure, and swift. It’s also important to mention that the Electronic Signature & Records Association reported that leveraging electronic signature integrations can lead to in-house performance increases when obtaining approvals as observed in a company case study by a remarkable 83%. To drive the speed and accuracy of your in-house contract approvals, speed of closing on deals, and mitigation of delays, we highly recommend adopting a comprehensive contract lifecycle management system that is equipped with electronic signature integrations. The ability to send, sign, and execute contracts securely no matter the distance geographically allows companies to save incredible amounts of time during the contract negotiation phase. And what does this result in? Faster closure rates on your most important deals. The cost-efficiency of electronic signatures shouldn’t be overlooked. You eliminate the need to print, scan, and mail physical documents with paperless, digital signatures. Electronic signatures are inherently more secure than traditional wet signatures, as every e-signature contains a digital “fingerprint” in the form of a hash. Sensitive client data is also secured via tamper-evident seals that are employed to validate each signature.
With reduced turnaround times provided by the efficiency and instantaneous nature of the e-signature, you accelerate the speed of the contract lifecycle and improve the client experience with a fast and efficient experience that keeps them returning to your company.
The introduction of automation has revolutionized modern contract lifecycle management. In summary, the flexibility and customization of automated contract workflows provides companies with several advantages in their contracting procedures. These include the ability to standardize signing, authoring, and approvals, increase the value of business partnerships, e-sign contracts, and improve upon compliance and risk management strategies.
Automation can eliminate several common manual errors involved in contract management, especially when a high-volume, highly complex contract portfolio is concerned. A customized contract workflow allows you to predetermine the sequence of events of a contract, meaning the document will be sent to select stakeholders in various departments at specific times so they can complete required actions on the contract.
Automation helps your business build reliable pathways for your contracts to be routed on so that you can simply configure the flow, and then set the contract off on the flow without worrying about it getting lost or sent to the wrong person. Not only will your employees appreciate the reliability and flexibility of contract workflow automation, but your clients, suppliers, and vendors will also enjoy the efficiency and ease provided by the automation.
One of the most notable benefits of contract automation is how effective it is for time-management. The automation of contract activities and tasks empowers users to gain control over the many elements of the contract lifecycle. Contract managers and business owners can then spend more time on strategic contract management initiatives conducive to improving contract performance and achieving contract management KPIs.
We have numerous resources available designed to support you in your contract management needs and goals. If you’re ready to learn more about how you improve your current contract management strategy, feel free to reach out to us! In the case that you’re wanting to start with a contract management software solution, then we’ll connect with a free demo.
If you’re wanting to take your contracts to next level, then it’s time to adopt a solution built onto your Microsoft Office 365, Teams, and SharePoint environment. This way, you’ll make the absolute most out of your current Microsoft investment and utilize proven and productive contract management. Our solution increases the efficiency and results of your digital contracts with optimized cloud security and storage, integrations with DocuSign, Adobe Sign, and Sertifi, and robust features like automated reminders and a Teams mobile app so you can take your contracts anywhere.
For more information, we would like to welcome you to schedule a free demo with us today.