With the many business relationships organizations have, contract agreements inevitably have to dictate operational terms and conductions. Keeping track of contract terms, requirements, and obligations systematically can prove frustratingly tricky when the number of contracts keeps rising.
However, it is possible to seamlessly manage numerous contracts simultaneously without experiencing burnout or losing track of contract management software. Integrating systems and automating contract management is one way to improve productivity and effectively manage risk.
Your company may choose to incorporate an internal document management system that you currently use to manage your contracts. While this may solve the repository challenge, it does not provide a means for collaborating with third parties, tracking workflows, or receiving important notifications and alerts, forcing you to look for a viable alternative.
What factors help you in choosing a contract management system? To address this concern, below are seven features to look out for.
- A storehouse of contract documents with appropriate data to successfully search for contracts
An organization with multiple mediums for storing contracts leads to mixing different document versions, creating duplicates, and making it almost impossible to locate contract agreements needed in urgent situations.
Documents on shared desktops, file cabinets, or portable discs can challenge identifying which variety to use as there may be different versions stored in other drives. Sometimes staff may not remember where crucial documents are, spending a lot of time searching in different places.
However, with an automatic contract management system, all documents are accessible to every team in a centralized repository that is organized and easy to navigate.
- Advanced search capabilities
Manual contract management lacks available search options enabling teams to misplace important information that remains inaccessible in critical moments. A full text and sophisticated search capabilities allow users to narrow down data based on factors such as contract title, name, type, author, or business industry.
The ability to narrow down a search using legal terms, phrases, or keywords can significantly enhance productivity and save time negotiating and signing contract agreements.
- Capability to electronically append signatures on contract agreements
Sending agreements back and forth the old-fashioned way creates risks and delays in executing a contract. With executives being too busy, getting opportunities to physically avail themselves to append signatures may be complex and lead to constant delays in contract accomplishment.
Electronic signatures provide a quicker legal way to get stakeholders’ consent on agreements. The platform offers added benefits with security, verification, and analytic abilities.
- Create new contacts and edit existing ones
Creating new contracts takes weeks before stakeholders reach mutual agreements. A contract management software expedites the contract creation process by providing standard contract types, a library of terms, and template automation.
Having a standard clause library with commonly used terms and clauses and their variations helps contract creators use unique language across business contracts. Contract creation becomes simple by adding clauses into a document with a click of a button. Template automation saves time by skillfully transferring clauses, legal phrases, and key metadata into mapped areas of a copy.
A proper contract management system can standardize contract types and govern standards. Without custom-designed software, contract developers would consistently have to re-create contracts each time by rechecking guidelines, policies, and acceptable useable language.
However, contract management software can automate the entire process by allowing users to define standard contract types and their related metadata instructions. The system helps companies enforce governance while enabling custom-made amendments to individual businesses and contract types.
A contract management solution facilitates a smooth amendment process through team collaboration, document sharing, efficient workflows, and information storage. Shareholders can collaborate on documents and seamlessly share amended documents safely within a short period.
- Analytics
Businesses keen on improving efficiency save a lot of time. Performance reports on contract agreements give contract managers and relevant teams insight into work patterns to identify shortfalls and eliminate them.
Contract management systems enable users to view analytic data that helps determine a contract’s performance from beginning to execution. With this keen follow-up of the contract process, it is possible to mitigate risk, control expenditure and manage challenges before they arise.
- Workflow management
Sending contracts back and forth for approval via email is highly inefficient due to document versioning issues and a lack of transparency. Automating workflows provide a more efficient process by enabling users to select participants and collaborate on a single file irrespective of their physical location. Also, notifications allow for instant updates while workflow history is highly beneficial and comes in handy during auditing.
- Ability to manage third party contracts
Organizations that receive contracts from third parties spend a lot of time counter-checking contract compliance with their standards. Contract management software integrates artificial intelligence and machine learning to determine a variance in clauses and auto-extract vital information from third-party contracts to furnish their contract repository requirements.
Conclusion
Contract management lifecycle is a complex process that requires keen attention and a comprehensive understanding of the risks involved. Integrating a contract management solution is therefore essential in improving efficiency and productivity.
