“Initiate a proper handshake and the whole world opens up for you.” ― James D Wilson
A handshake is a way to establish goodwill and kick off an important negotiation. It does have its limits, however. Occasionally, a contract manager, general counsel, businessperson, etc. will reminisce about the good old days when deals were sealed with a handshake. Supposedly, that was enough of a contract to keep both parties happy. While a handshake alone was never a good idea (history affirms this), it certainly wouldn't work now. A legal and workable contract is often complex and comprised of many moving parts. You need an expert team and advanced tools like contract management software to negotiate a strong contract. The right program can keep the process on track and prevent you from overlooking important details. Plus, it helps you create an honest and fair agreement that is easily enforceable. You and the other party will both benefit. Here are five ways that contract management software will strengthen your negotiations.
1. Act as an Early Warning System
Your company undoubtedly has several contracts that have to be renegotiated every few years or so, if not annually. With all those deals, it is too easy to overlook the end date of a contract until it's upon you. You may also miss the date and lose a valuable partner. Or, you could have an unprofitable contract automatically renew. New technology has solved this problem. Intelligent contract management will automatically send you alerts and notifications about important dates and developments on individual contracts. It can also track contract obligations and notify you of a potential breach of contract. That means you and your team will have time to adequately prepare for negotiations and construct contracts that are profitable and fair. It can also detect a breach of contract.
2. Keep Negotiation Team Informed
The right software allows easy access to all documents that apply to the negotiations. It provides a central repository that stores all contract drafts, in-process work, and third-party documents. The employees involved in the negotiations can easily search for and retrieve the items they need from wherever they are. You can stay in touch with your General Counsel while she's on vacation in Bora Bora. Your VP of Sales can weigh in while on the road to a conference. Those involved can suggest changes or sign off on certain provisions in minutes instead of days. When everyone is in the loop, mistakes are eliminated, and you can negotiate with confidence. Plus, it prevents negotiations from dragging on and on, which can sometimes end with no contract at all.
3. Improve Contract Compliance
As a contract manager, you are under constant pressure to stay current with federal, state, and local regulations. Even the most conscientious negotiation team can overlook the latest changes to the law or interpret them incorrectly. These issues can lead to steep fines and other costly legal actions that hurt your bottom line and damage your reputation. Your business partner may also be hurt by these mistakes.
Sometimes, you don't live up to your part of the deal even though your intentions are good. You can be inadvertently non-compliant with a specific contract's terms or obligations by overlooking important details. Unfortunately, these lapses happen more than you might anticipate. Contract management software systems can improve contract compliance. That's because you can enter contract obligations into the system manually or have them extracted from the actual contract. Then these issues can be added to the workflow and reporting processes, so they are not missed. The software makes you a better business partner.
These features allow you to stay in good standing with current partners and make the next round of negotiations easier. The protections the program offers are also a selling point for new vendors. You can demonstrate how the software protects the interests of both partners. This should get you to "yes" more quickly.
4. Streamline Negotiation Process
In addition to easy document access and automatic notifications, contract management software makes it easier to edit the contract drafts. A detailed version history lets you see who made changes to the draft and when. You can also create customized email templates to help streamline the negotiation process. You will work with an actual contract dashboard that keeps you up-to-date on the contract status during the negotiation.
5. Increase Speed and Accuracy
The right contract management software enabled by AI (artificial intelligence) can increase the speed and accuracy of the contracting process, keeping you one step ahead. Businesses face many challenges related to document processing and ensuring the right data is associated with the right contract, and quickly. Intelligent contract management software can improve this process by understanding documents and quickly extracting data such as contract terms across multiple languages. This allows you to turn contracts into usable data and shifts your ability to act on information rather than just compile it. As you evaluate various contract management vendors, it is important to understand their AI/ML offerings. For example, Contracts 365 has collaborated with Microsoft Applied AI services, to power its contract management solution.
In the end, a firm handshake might show goodwill, but it has its' flaws as an actual agreement. People often think they agree on terms until they see them in writing. The handshake never really worked in business, and it certainly doesn't now. Contract issues are complex and require legal review and input from various on-staff experts. Goodwill is a necessary element of negotiations, but you also need industry knowledge and advanced, intelligent tools to develop a contract that works for both parties concerned.
Come see a demo of how Contracts 365 can improve your contract management processes through our AI-based contract management tools.