For any organization, managing contracts is a very tricky and daunting task. For instance, a simple contract expiry query or the effort to locate the latest contract version can handicap a transaction. Businesses, to overcome such a challenge and maximize workflow efficiency, have taken to document management system (DMS). Progressive organizations, for better management, prefer advanced contract management software to an everyday DMS.
WHY DO WE NEED A CONTRACT MANAGEMENT SOFTWARE?
A Contract Management software provides necessary insight into contract data, facilitates collaboration between parties, and saves time and cost with negligible risks. A report once stated that ineffective Contract management software could cost businesses $100 billion per year in missed savings opportunities.” Therefore, a contract management system is a better way to contract management which also takes care of tracking and negotiation. Good software is necessary for reducing supply chain risk and ensuring compliance at all stages of the supply/supplier relationship. An advanced contract management software is essential to achieve success with a product launch, global expansion, hiring, and other events.
7 REASONS WHY YOU NEED A CONTRACT MANAGEMENT SOFTWARE
CONTRACT EXPIRATION Unclear expiry date leads to an extension of the contract. It is okay if the partnership worked out successfully but certainly not desirable if either party isn’t satisfied. The contract expiration date is an important indicator to review relationship with the current supplier. It is for both parties to benefit from a contract extension and make way for a better deal. While it ensures confirmed sales for the supplier, it also assures the buyer a good bargain. An advanced contract management software factors in the expiration date so it can render decision alert to the user.
DOCUMENT DIGITALIZATION Our market insight informs us that many organizations are still using paper. Inducting an advanced contract management software is a lean method to embrace technology and improve the environment. Document digitalization facilitates accessible and central examination at any given time. Not only on desktop applications, but an advanced solution is also available on-the-go; i.e., your mobile devices. In the case of later, role-bound access to information is possible at any time without having to restructure your binders every few years.
CONTRACT AUTHORING With an advanced contract management solution in place, authoring contracts become easy and helps avoid repetition. A contract of similar terms, conditions, and legalese can be a template for repeat use. You can skip the redundancy of contract-drafting multiple times by making use of standard template and clauses that are pre-approved by your legal team and editorial board. It is as if the contracts will write themselves and offer you enough room to focus on other strategic matters of your business.
AUTOMATIC BOOKING An advanced contract management software has the facility of automated invoice processing. With it, you can easily match a purchase invoice to contractual agreements. The good thing is that you don’t have to encrypt a recurring invoice manually. The solution will automatically extract payment conditions from the contract. There is no need for manual intervention if installment and contractual specifics are a match. In addition to this, you can easily track the number of invoices booked for a particular contract and prevent fraudulent transactions for all in-valid contracts.
PERFORMANCE EVALUATION An advanced contract management system helps you with the insight needed to evaluate your supplier-performance. As an organization, you’ll have a standard contract protocol to measure supplier-performance. Such information helps you with deciding whether or not you can continue with a particular supplier. Performance evaluation also helps businesses to reward the best supplier and put in effort toward sustaining a long-term profitable relationship.
INDEXING, SEARCHING AND VERSION CONTROL An advanced contract management solution provides all necessary stakeholders the ability to search for all contracts in a centralised location with Optical Character Recognition (OCR) adding the ability to search for contracts that have been scanned in. This searching capability goes right down to clause level ensuring that all stakeholders are exposed to the latest version of the contract.
DIGITAL SIGNATURES In today's digital world, digital signatures should be an obvious tool to have in a business, yet, it is still relatively unused. The benefits for implementing a digital signature tool alone can lead to considerable time, cost and administrative savings. The following article, released by Finance Online, runs through various savings that a digital signature tool can bring to any organisation: Finance Online
We are already touching in 2022. There are a lot of expectations that your business needs to fulfill to acquire new clients, sustain existing ones and align with suppliers. With more and more advancement in technology, contract management software is only a little bargain. Furthermore, it is only smart for organizations to improve their contract management system early on. Because later, it will be too late to understand the nuances of an advanced system when the world would be extracting maximum value already.