4 Ways Contract Management Software Reduces Costs: Your Smart Investment For Today
The combination of inflation, high interest rates, and rising wages has left many businesses struggling to get by. In times like these, you need to be cautious about how you invest in your business. This can mean putting off some investments, but in some cases, not making investments in your company can undermine its profitability. Especially during periods of economic turbulence, it’s critical to prioritize investments that will ultimately reduce costs. Effective contract management software is just this kind of investment.
Contract management is essential but labor intensive.
Every business relies on an array of contracts that govern sales, procurement, employment, business services, and more. Effectively managing these contracts, including keeping track of key terms and deliverables, is essential to core business operations as well as your bottom line. However, the task can be incredibly time consuming and labor intensive. You can’t afford for your legal or contract management personnel to spend their valuable time poring through contract details to answer basic questions. You also can’t afford for your staff to lose track of deliverables, renewal dates, and other important contract terms. Fortunately, a contract management system can save valuable staff time while improving compliance and reducing your company’s risk of loss.
Efficient and reliable contract management saves time and money while reducing risk.
The right contract lifecycle management software can cut costs for your businesses in multiple ways:
Transparency & Accessibility
Consider how much time your staff currently spends locating contract information. If you’re still using paper contract repositories, it could be significant. However, without the right software, even digitally stored documents can take time to locate in their most recent, approved form. How much could you save in labor costs if your staff could quickly and easily find essential contract information?
Contract management software allows employees with the appropriate permissions to easily view the contract information they need when they need it. With streamlined access to deadlines, renewal dates, deliverables, and more, they won’t need to request the information from your legal or contract management staff, who are then freed to focus on more productive tasks. The result is more efficient operations.
Streamlined Contract Creation & Approval
The right contract lifecycle management (CLM) software can streamline the contract creation process with standardization. It can house a central source for pre-approved contract language, which has benefits for both purchase and sales contracts. This language can be integrated into contract templates, and its easy accessibility helps ensure negotiators are always up to date on acceptable terms.
CLM software can also be used to create automated workflows that send a variety of alerts and notifications to stakeholders to keep deals moving through the pipeline. Automatic notifications and integrated e-signature capabilities can facilitate delivery to and return from other parties, both standardizing and expediting the sales process. By eliminating unnecessary delays, companies can shorten the sales cycle and generate revenue more quickly.
Improved Compliance & Enforcement
With enhanced visibility of contract terms, teams are less likely to miss deadlines or otherwise unintentionally breach those terms. Contract breaches can be immensely costly for businesses, so ensuring you meet all your obligations is essential. A robust contract management system can trigger alerts when issues arise and send notifications of important events, ensuring the right people understand what needs to be done and when.
Conversely, your team will also be better positioned to enforce contract terms that benefit your business. For example, if your business is entitled to volume discounts that aren’t appearing on invoices, late fees for missed payments, or services that aren’t being delivered, effective contract management software can highlight these breaches to ensure your organization is getting the value promised in its contracts.
Enhanced Security Systems
Anytime you entrust your company’s data to a cloud-based service provider, security is a paramount concern. IBM estimates that in 2023, the global average cost of a data breach is $4.45 million and climbing. Ensure that any cloud provider you rely on has a strong security record, and train your team to follow cybersecurity best practices.
At the same time, your contract management software must provide quick and easy access for those who need it. Overly elaborate security hurdles can erode the efficiency gains and, consequently, the cost savings that the software offers. The ideal contract management solution will provide proven security for your documents without impeding the flow of work.
An Example of ROI
One typical business case for contract management software is searching for a final contract. For this example, let’s assume these are the salaries of contract personnel.
|EXAMPLE SALARY (Annual)
|EXAMPLE PAY BY HOUR
|$100,000 - $200,000
|$50,000 - $120,000
|$34,000 - $70,000
If a paralegal spends 5 minutes searching for a contract, they are paid $2.08 for their time. If the search takes 15 minutes, the cost increases to $6.25. A paralegal may perform 2,000 contract searches per year, which could cost between $4,100 and $12,500.
CLM software can help paralegals find contracts more quickly and easily. If a paralegal can find a contract in 1 minute using contract management software, the annual cost of this activity is reduced by between $3,333 and $11,667.
Contract managers and attorneys also spend time searching for contracts. Their salaries are higher than paralegals, so the cost of their time is also higher. A contract manager could save between $5,128 and $17,984 per year by using a contract management system. An attorney could save between $9,616 and $33,656 per year.
Contracts 365 integrates with Microsoft 365 for seamless, secure, and complete contract management.
Because it was designed specifically for Microsoft 365 users, Contracts 365 provides significant advantages over other contract management software. It natively integrates with your Microsoft platform, allowing you to leverage your company’s existing investment in Microsoft applications and cloud storage and implement the solution without extensive staff training.
Additionally, Contracts 365 provides best-in-class security features. You can apply the same login credentials and security settings as you use in Microsoft 365 and enjoy the protection of Microsoft’s entire security infrastructure, including Endpoint Manager, Defender, Sentinel, and more, for industry-leading security and unparalleled control of your data. Configurable permissions ensure access and approval authority align with your company’s policies and business requirements.
Contracts 365 provides several other important features that save businesses time and money while improving contract accuracy, compliance, and enforcement.
Contracts 365 provides a secure, centralized, easily accessible repository for all contracts, including those under negotiation. Search capabilities powered by rich metadata allow staff to quickly find the information they need in contracts or supporting materials. Users can also extract contract-specific obligations and incorporate them into future reports and workflows. Easy-to-read, customizable reports can be delivered at scheduled times or viewed on demand.
Templates & Contract Wizard
The intuitive contract wizard can create a wide variety of contract types using contract playbooks and clause libraries to facilitate customization while reducing errors and inconsistencies. Users can also employ templates to quickly create contracts that use only approved language that conforms to specific business rules, both saving time for your legal staff and minimizing risk.
Auto-Approval & Alerts
Configurable auto-approval and alert capabilities speed the contract creation process and make it easy to track important details throughout the contract lifecycle by sending notifications to key players on defined schedules or when triggered by specific events. The ability to trigger automatic notifications of contract expiration, renewal, or other required actions helps keep in-process contracts on track to execution as well as prevent lapses and breaches of existing agreements.
Native E-Signature Integrations
Contracts 365 fully integrates with DocuSign and Adobe Sign, helping create a secure and seamless digital closing process without the need to download additional software. When the negotiation process is complete, automation can ensure contracts are promptly routed for signature, send notifications at every step, and then securely send documents to your repository.
Together, these features create a powerful tool for saving time and money while reducing errors, risk, and avoidable losses. Additionally, as cloud-based software, Contracts 365 is easily scalable, giving you the flexibility you need to grow your business and flow with changing conditions while ensuring long-term savings.
As costs and interest rates continue to rise, businesses can’t afford to waste time or money. Investing in effective contract management software now can help your organization weather current and future economic hard times by cutting unnecessary costs, reducing risk, and empowering your staff to spend more time on revenue-generating activities. How much is it costing your business to continue using its legacy contract management system?
To learn more about Contracts 365 and how it’s helping businesses like yours reduce costs and risk, browse our case studies or our library of free ebooks. Interested in implementing contract management solution? Get in touch or request a demo to see how Contracts365 can streamline your business processes.