The fundamentals of contract management involve equal amounts of promise and peril for organizations.
Poorly managed contracting can bring up legal issues, eat away at revenue, and damage working relationships with partners. On the other hand, when contracts are effectively managed, the organization can avoid disputes, maintain healthy partnerships, and realize expected business benefits. This is why the overall health of an organization can often be determined by how well contracts are devised and executed.
Contract management should support organizational performance while reducing risk. But unfortunately, businesses often become increasingly complex while their contract management process remains the same.
Let’s explore how organizations can create and optimize a contract management process that’s ready to scale with them — and the benefits they’ll enjoy when they do.
Why You Should Create Automated Contract Management Workflows
With the right balance of human effort and technology, you can build a contract management process that serves as the foundation for a successful enterprise.
Not every step in the contract management workflow requires human hands. While each step in the process requires adequate attention to detail, many also allow for automation of certain key steps.
Some stages of the contract management process lend themselves to automation more than others. For example, an automated system can be used to receive new requests for contracts and to draft basic legal language for new contracts. The same goes for auditing and reporting as well as formalities like approval and renewal of contracts.
On the other hand, contract negotiations, management of contractual agreements, and revisions will typically require a bit more of a hands-on approach from team members.
Thinking about the broader contract management process, there are a few key wins that organizations can score through automation.
No team member wants the arduous task of tracking every single milestone within the contracting process. A manual approach here can be truly risky and unnecessarily time-consuming.
Today, a modern contract management tool should automate notifications that help manage the execution of contracts. The ability to set reminders within the platform and even enable automatic email reminders also takes the burden of remembering off of your team’s (likely very full) plate.
Saving time just moving contracts along enables your team to focus on closing more deals and other important tasks that drive your business forward.
The signature portion is arguably the most important part of the contract.
It represents a relatively sacred (in a business context) agreement between parties that they’ll do what they’ve promised to do. There’s no deal until the contract is signed.
With eSignature as an option, your team can keep pace and ensure that everything gets signed as quickly as possible. No more shifting papers between offices and hiring couriers for special deliveries.
eSignatures enable deals to be confirmed on the go, all while ensuring security and efficiency at the same time. Make sure they’re a part of your contract management stack.
Learn more about how eSignatures enable better sales when you read “5 Amazing Business Benefits of Implementing eSignatures into Your Sales Ops.”
There’s simply no need to draft every single contract from scratch.
While you certainly want every contract to feel (and to some extent actually be) personalized for each client, a little standardization can go a long way. Having a reliable library of contracts will give you a strong foundation for developing even the most complex contracts.
Whatever contract management tool you’re using, it should empower you to easily revise existing templates to suit the unique needs of each specific agreement. You may even want to embrace commenting and note-taking features that help speed up the revision and renewal phases.
In short, having a stable cache of contracts at the ready is a major asset for your contract management process.
How to Simplify the Contract Management Process
While it’s easy to get overwhelmed by the minutiae of the contract management process, there’s a lot that organizations can do at a high level to improve it.
Audit Your Current Workflow
You — and many of your colleagues — probably have a sense of what isn’t working when it comes to your contract management.
Take a step back to thoroughly talk through and review existing processes in order to document what’s going well and what’s not. Armed with that baseline information, you can embark on improving how contracts are handled within your organization.
Whether your goals are to eliminate certain risks or save money, it’s important to know exactly why you’re altering your contract management approach. To reimagine how contract management works within your company, you need both the why and the how.
Automate Manual Tasks
The contract management process is awash in important business and legal documents.
Without the right system in place, that scope of work or non-disclosure agreement might get misplaced. These documents are becoming more complex as the business deals do as well. Staying on track with key dates and compliance issues could make or break your business.
Taking the time to automate some of these tasks can help ensure that all of the particulars are taken care of as your organization grows. By automating repeatable tasks, your team is freed up to focus on the bigger picture of hitting targets and achieving business goals.
Let your contract management software do the heavy lifting while the team focuses on keeping clients happy.
Use an End-To-End Contract Management System
Yes, every client requires personalized engagement. And while it may seem a bit counterintuitive, standardizing your contract management process allows you to support each client more effectively.
Having a contract management system that keeps all of your contracts and interactions with stakeholders in the same place can save you from problems down the line with missing paperwork and miscommunication.
A single system allows for better communication between relevant parties in the contracting process and keeps all sensitive information more secure. It also helps to speed along the process of devising and processing contracts by automating key parts of the workflow that might have slowed things down in other contexts.
Continuously Review Your Contract Management Workflows
Make sure your contract management keeps pace with your overall growth trajectory.
How you managed contracts for your first few clients should and will change significantly, so empower your team to review your contract management process at regular intervals (quarterly or annually).
Don’t be afraid to call out key wins while also tackling challenges and risks that pop up. The best time to make changes to the contract management process is before you run into problems.
Bring Your Contract Management Process Into the Modern Era
Whether your sales team is working to improve their contract management or you need to overhaul how your entire organization manages contracts, the tools and resources are out there to improve your process.
With a little thoughtful planning and an assist from modern technology, you can shift contract management from being a challenge for your organization to a streamlined and efficient process that helps to accelerate your growth.
For tips on automating almost any tedious business tasks, check out our “5 Steps to Eliminating Paper Pushing and Flowing Better.”