Contracts are an important part of the business. While making any deal, both parties need to sign the contract. When the business grows, it gets difficult for the management to manage all the contracts. Managing contracts can be very hectic and tedious. Also, keeping track of every contract can be a burden for the business. So, to overcome this challenge, many businesses have started investing in contract management software. This is a kind of document management system which will help the business in keeping track of all the contracts.
Contract management helps create, implement, and evaluate the contracts to maximize business performance and prevent risk. Contract management software will help in keeping track and will comply with all the laws and rules. This will save you from unwanted risks and keep everything confidential. An efficient contract management system will help in providing necessary insights into contract data, will facilitate collaboration between the parties, save time and eliminate all the contract-related risks. Also, many businesses feel the risk of keeping confidential contracts in physical spaces. There is a huge risk of keeping contracts as it is prone to risks like theft etc. The contract management software with the integration of artificial intelligence and cloud computing will protect your database. You can have access to these anytime, anywhere. Not only this, but the contract management software will comply with all the legal requirements, which will save you from breaching the rules and regulations.
Following are some of the reasons why businesses need a contract management system:
- Contract expiration- It is important to keep your eyes on the expiration date of the contract. However, it depends upon both the parties to continue or extend the contract or to terminate it. The business should be aware of the contract expiration. As there are many contracts and as already said, it gets difficult to manage them, the contract management system will help in knowing all the expiration dates and help you in keeping track of all the coming ones as well.
- Documents in cloud system- Now the businesses need not worry about the safety of the documents. The contract management software is integrated with the cloud system and artificial intelligence. This helps in saving confidential documents. Only both parties can have direct access to the contracts. The cloud system will keep the contract safe till the end. It reduces the burden of keeping the documents in a safe place because nothing is safer than storing the documents in the cloud system.
- Compliance- Every contract is documented in compliance with the rules and regulations. The templates are as per the requirement of the law. It can be customized. The contracts will be saved keeping in mind the laws. Enforcing compliance will mitigate the risks in the business.
- Avoid repetition- There are many contracts that require the same laws. The contract management software already has some in-build templates. These templates can be used repeatedly. You can skip the unnecessary contract-drafting multiple times by making use of an in-build template pre-approved by your legal team and editorial board. This way, you will be able to focus on the other strategic things which will help your company to grow.
- Increases visibility- The contract management software will help in increasing the visibility of the spending. This will help the business to know where their money is going. If excess, they can control the undocumented expenditures.
- Functional efficiency- This will help in increasing the functional efficiency as the whole process in the contract management system is automated. By reducing manual efforts, it improves business efficiency and the scope of errors. The staff will be able to focus on the other strategies to have an improvement in the functioning.
- High visibility of suppliers- The contract management system will help in tracking the suppliers and will assess their performance based on the criteria mentioned. This will help in evaluating the suppliers’ risk as well. So, the business can take decisions and build strategies to combat it. This will help the business to have a long-term connection with the suppliers.
- Improves business functioning- The contract management will regulate the activities, which will help the business to have its eye on the increasing costs and risk. The contract management system will help the knowing the areas of revenue optimization.
So above are some of the common benefits of contract management software.
Also, to know it better, it is essential to understand the stages of contract management software. Following are the stages of contract management software:
- Identify your business objectives- Before the contract, it is very much important for the business to identify and define the business objectives. These objectives are necessary for contract drafting. Also, it is important to decide the performance expectations and to minimize the risk situations.
- Contract drafting- Once the objectives are decided, the drafting process will begin. The templates will be updated, keeping in mind all the information. The templates are customized, keeping in mind the legal laws. It is an important stage as a single mistake here can cause huge losses.
- Negotiation- Once the contract gets drafted, the negotiation begins between the parties. The negotiation can be done on the basis of price, terms and conditions, warranty, renewals, termination, etc. It is important for both parties to accept all the terms and conditions. It should be ideally done as this communication will help in transparency.
- Finalizing the contract- At this stage, the contract between the parties will be finalized.
- Managing termination- Once the expiration date is coming, both parties have to make a decision whether to terminate or to renew the contract.
So above are the stages of contract management software. You can contact ‘Neologix’ if you are interested as they will ensure a streamlined and structured contract management process with the capabilities of Microsoft SharePoint. It will help in automating your entire contract lifecycles with Microsoft SharePoint.