3 Contract Management Bottlenecks Eliminated by Automation
by Dermot Whittaker on February 1, 2019
Contracts are essential in any business, and while "landing" a contract is always celebrated, you know that creating and executing one is not done overnight. Even with your expertise in the area, managing contracts can be a complex and time-consuming task.
As you know from experience, there are three areas where bottlenecks in this process commonly happen: contract requests, contract approvals, and standardization and compliance. You can free yourself from many complications by embracing new technology. Quality contract management software provides automation that eliminates these bottlenecks, saving you valuable time and increasing your profit margin. The software may also save your staff's sanity.
Traditionally, a contract request requires members of your legal team to carefully create an agreement that satisfies both parties while meeting all applicable rules and regulations in the industry. Without automation, this process can only be safely accomplished by an expert. Tracking down the correct templates for the contract can also take a long time if you are relying on decentralized, manual methods. However, if you use software, the process becomes simple enough for many members of your staff to use, including those without formal legal training.
In general, this automation process requires the user to answer a number of questions that were developed by legal experts. By simply answering the questions, employees can efficiently complete a sound contract that only needs to be approved and signed. Instead of spending hours drafting routine contracts, your legal team can spend more time on other crucial tasks. Your contracts can also be put into effect more quickly, allowing the companies involved to proceed with other essential business concerns.
Possibly the biggest time killer of all is the contract approval process. First, the contract must reflect the wishes of people in both companies or it will not be accepted. Multiple contract revisions can take months. Automation allows for immediate transmission of the contract documents that are the focus of the negotiation. What used to take weeks of back and forth communications can be handled in a few days or less, and you do not have to involve the post office or package delivery service.
Also, contract management software allows you to send the document for approval to the stakeholders wherever they are and at any time. As long as those involved have access to a computing device, they can receive the latest version of the contract whether they are at the office or on a business trip, vacation or the golf course. Everyone gets the right document and can review, approve and sign it promptly. You never need to gather the parties in the same room or in the same country to complete your agreement.
Standardization and Compliance
Even your expert legal team can make mistakes in contract language, which leaves your company open to misunderstandings and possible future legal action. With the right contract management software, you can create standardized agreements using automated contract templates. These templates are constructed using pre-approved contract language that reflects the goal of your business and judgement of your legal team. Using these templates helps ensure that the finished product contains all the necessary language and protects everyone involved. Your business relationship will be shielded from unnecessary risk that could harm everyone's business interests.
Automation also helps you stay compliant with industry standards. A contract must protect you and your business partners from inadvertently violating state and federal laws. Often, even industry specialists have difficulty keeping current with the numerous changes in the law that happen frequently.
In California this year, dozens of changes were made to construction laws that have those in the industry reeling to keep their business dealings in compliance. Automation can certainly help solve their problem. Advanced software programs allow legal to review and update contract language to be sure it is compliant. It limits the downtime associated with changes in the law, helping to keep your company profitable. By staying compliant, you will not face government fines or sanctions that are costly and may cause long-term operation issues.
The expression "hammering out a contract" accurately reflects the traditional way of developing these agreements. Completing a contract usually involved endless meetings, lengthy telephone conferences and repeated legal reviews. The process simply dragged on, particularly if large numbers of people were involved. Fortunately, developing and enacting a contract does not require a hammer anymore. Instead, you can use contract management software as your tool of choice to make the process easier and less prone to error.
An advanced program provides you with the automation necessary to accurately incorporate the terms of the companies involved and make the contract legally sound and industry compliant. In fact, your sales force will be able to construct their own contracts, which takes the weight off your legal department or team. Also, the key players will always have fast access to any changes and be able to review and approve the document anywhere at any time. Contract management software will change the way you approach your business operations and allow you to benefit from agreements more quickly.