Irrespective of region, industry, and size, there’re some things all businesses have in common. To begin with, they all run hinged on a foundation of contracts. If you concur the same applies to your business, are you presently using a contract management system?
Regardless of the field of your business, you most likely enter into more than a dozen contracts daily. These contracts could create legal bonds or bind suppliers and purchases. The more the number of active contracts you’ve, the more profit you make. But, are you managing these contracts in a system that accomplishes this?
Did you know that businesses lose up to 9.2% of business revenue as a result of lousy contract management? Well, there are quite a few reasons why contracts are tough to manage:
- They can consume a lot of time to copy, file and store
- Approval delays can frustrate your clients and make you less productive
- Incorrect tracking of payments and price can create revenue holes
- Poor management can result in overlooking policy compliance or incorrect info
Before delving further into the topic, let’s first understand what content management is and why it’s so necessary for running a business:
What is Contract Management, Anyway?
Contract management is the organization of contracts from employees, customers, partners or vendors. In simpler layman terms, a contract management system can be described as an electronic version of a filing cabinet.
It supports the whole client and contract lifecycle that covers any process that utilizes, creates or contributes contract data. Effective Contract Management calls for an understanding of every single step in the contract process.
The business world is continuously changing. New ways of driving revenue are forcing many businesses to rethink the way they manage the client lifecycle — making contract management systems indispensable.
Now that that’s out of the way, let’s look at how businesses can benefit from a contract management system:
Many small businesses have relatively tight budgets. So, dependent on where the business is situated, lack of additional capital often means a lack of office space given the ridiculous cost of commercial real estate, especially in big towns. Apparently, besides the lack of space, most businesses prefer to have a paperless office. Online contract management solutions are beneficial for small businesses, as they eliminate the need for storage space and make it much easier to store all contracts and related documents in one central location – the cloud.
Increase in Communication and Collaboration
A contract management system helps increase collaboration and communication in a business. While the sales team hardly ever talk to the Legal team under normal circumstances, with a contract management system, the sales teams understand that they’ve to get every contract approved through the legal team. Simply having the system in place forces both teams to create a contract that is approved by all the necessary parties.
Once all business contracts have been uploaded to a central repository, it is easier to organize documents into different folders and subfolders. There will likely never be the need to flip through documents searching for a specific clause. This and automation and centralization will without a doubt save a lot of time, as everything can be quickly searched, retrieved and saved.
Keeping Track of Important Dates
It is essential for businesses to keep a close watch of important contract dates. Automatic alerts make doing so very easy. Automated contract management systems allow you to schedule notifications as needed so that you never miss important dates of a contract’s lifespan. Using the right tools to monitor and track contracts will positively affect your business. If you are not ready to commit to a contract management software, you can simply use Excel to manage contracts.
How many times have you found yourself scanning through contract clauses, in search of just some keywords? Also, storing soft-copies of signed agreements, contract management systems allow you to pull out the key contract terms and fields for quick viewing. This means no more perusing through pages of agreements to find your fixed pricing duration, payment terms, termination options, etc.
By having contracted values, termination clauses, documents and contact details only a few clicks away means you get to save the time that was once getting lost in filing cabinets or devoted to fighting with spreadsheets.
Effortless Data Protection
Data security is now more important than ever regardless of a business’s size or sector. If a business has intellectual property, client data, employee records or any other type of data of value, it’s important that it takes steps to safeguard it properly. The great thing about online contract management is that it allows for effortless data protection. To make sure that data is protected, businesses should invest in a contract management system that has measures like two-factor authentication and encryption.
The contract management system will give you analysis and progress reports. You can use these to check the areas of your business that you need to strengthen and improve. It can actually be your ally in boosting your business. It automatically updates the data on the system, so that you won’t miss out on opportunities, like expiring contracts, customers’ preferences and many more.
You must not feel intimidated by this kind of advanced technology, even if you’re not that proficient with it. It’ll guide you with each step and with continued use, it’ll be easier to integrate and utilize the right tools with the software so that you can maximize its features.