Regardless of your industry and your company size, one must-have for companies is Contract Lifecycle Management Software. Contracts are one of the most valuable assets that a company can have. It doesn’t take a business expert to know that business deals are essential to the survival of a company. Many may ask “What Is Contract Management?” This question is what we will answer in this article.
Contracts act as protection for you and your company against cheaters and crooks whose predisposition is to take care of their own needs no matter how selfish their means become. A Contract is a legally binding document signed by multiple parties. The contract will also contain essential terms that will ensure that you get the most out of your arrangements.
Managing dozens of these binding documents could prove to be extremely difficult. Mismanagement could prove to be catastrophic, especially for companies that are just taking off. Studies have shown that poor contract management could lead to over a 9% loss in their annual revenue. This study still does not take into account the legal fees included when your company faces a lawsuit.
Here are some advantages to having a Contract Lifecycle Management integrated into your business operations.
1. Removes The Need For Manual Labor
Physical contracts require much handling. A massive amount of resources like time, manpower, paper, and money are used to copy, file, and store these contracts. The need for such is eradicated with the use of digital contracts. There are computer programs that are easy to learn and use for the encoding process, such as Microsoft Office.
2. Better Security
Digital Contracts are much harder to steal, change, or forge. A physical copy of a contract is much more susceptible to unfortunate and natural events like fires, floods, and earthquakes. Should the unthinkable happen, it is best to know that your contracts are safe in the digital world.
3. Increase Visibility of Contract Data
It’s hard to know and memorize all contract data. Without software to collate all information, it is much harder to remember the listed terms on the contracts. Specific data such as renewal dates, deliverables, and price of goods/services are essential data that you should know, so you do not get caught guilty of Breach of Contract. By collecting all contract data and having them in one program, you can easily see all of the information and make better decisions.
4. Catch Mistakes
It may sound unbelievable, but you would be surprised just how many contracts have been rendered void due to a small error like a single typo. A simple typing error can also give the entire contract a different meaning that could be used to your disadvantage. Often, the discovery of such a mistake could push back the signing date for weeks. Aside from the added hassle that comes with reprinting, there is also the embarrassment that comes with having to withdraw a document that has already been sent. The computer software will catch these mistakes and guarantee an error-free document.
5. Proper Tracking Of Payments
One crucial task of a Contract Lifecycle Management Software is to track both the payments that your company will be taking and making. This will ensure that you have records of your cash flows. Inconsistencies in budget allocations can bring about the downfall of your company. A nonexistent budget tracker renders the company vulnerable to corruption and theft.
6. Electronic Signatures
The Contract Signing process without software requires much time, usually taking a couple of weeks if not months. The invention of electronic signatures mitigates this. With e-signatures, companies can send over a digital copy of the contract to their client or vendor and then have it immediately signed upon receipt. This particular benefit becomes quite useful for companies who have or are looking to land international clients. What this does is that it removes the need for physical copies of a contract to be shipped, thereby reducing the time needed to complete the contract signing process. e-Signatures will also eliminate the costs that come with having contracts signed in person.
7. Faster Approval
Having contracts approved by multiple departments is a painstakingly long and arduous process. A long waiting time just would not do for contracts that need to be signed ASAP. A Contract Lifecycle Management Software will make the procedure faster as the contract can be viewed and approved by multiple parties at the same time.
