Contracts are the foundation of commerce, but they can be complicated. From drafting to signing and beyond, contracts require back-and-forth negotiation between teams.
Contract management tools streamline contract processes, reducing them to just a few stages. They also allow for customized reporting that can be analyzed to uncover insights.
Streamlined Processes
Businesses often handle a high volume of contracts on a regular basis, including employee and independent contractor agreements, vendor contracts, and non-disclosure documents. These contracts require oversight from beginning to end, but many organizations find it difficult to manage these agreements efficiently due to the sheer volume of Contract Lifecycle Management activities. As a result, in-house legal teams get bogged down with routine tasks and lack the time to focus on more complex, value-generating work.
Contract lifecycle management (CLM) software is a powerful tool that streamlines contract management processes, increases efficiency, improves compliance, and reduces risk. However, there are a few things to keep in mind when choosing the best CLM solution for your organization.
Start by identifying your needs. What features are essential? For example, if you want customizable templates, version tracking, or e-signature capabilities, make sure to highlight those during your search. Then, prioritize your list of must-haves so you can narrow down your options and save time during the selection process.
Keeping up with contract milestones can be a challenge especially when your team is working from different locations. Fortunately, contract management software allows you to automate key dates so that you never miss an opportunity or a deadline. This feature is essential for ensuring compliance and improving productivity across your entire enterprise. Additionally, it makes it easy to track progress and analyze performance data.
Automated Key Dates
Businesses handle many contracts on a regular basis, including employee and independent contractor agreements, vendor contracts, and non-disclosure agreements. Overseeing all of these contracts can easily become a full-time job for in-house legal teams. This is why CLM software can help, acting like a sous chef to automate and standardize contract creation, approvals, signature collection, renewals, and reporting so that lawyers can focus on their core competencies.
Whether it’s an automatic reminder to sign an agreement before the expiration date or a notification when a contract contains a force majeure clause, CLM software takes the guesswork out of ensuring that crucial contract milestones and compliance standards are not missed. It also offers custom reporting tools that allow users to set up and analyze reports based on tagged data, such as the number of contracts with a specific milestone or the percentage of contracts with a certain condition.
CLM solutions offer a range of automations to help streamline and add structure to different aspects of contracting, but there is no one-size-fits-all solution. A good CLM system should provide the flexibility needed to address the unique needs of your business while leveraging best-in-class processes and methodologies to reduce risk, improve productivity, and deliver greater business value.
Real-Time Reporting
Keeping track of contracts is essential to ensuring that business processes are operating as they should. Missed contract dates, for instance, can result in costly procurement, legal, and vendor issues. Missed contract approval deadlines can also lead to project delays and frustrated customers and vendors.
Fortunately, there are many ways to automate and streamline the contracting process. One of the best is through Contract Lifecycle Management (CLM) software. CLM tools provide the automation, visibility, and collaboration needed to reduce cycle time from draft to execution while improving compliance and risk mitigation.
A good CLM solution will offer real-time reporting capabilities. Reports can be delivered to a customizable dashboard or via a data grid, providing an easy-to-understand overview of the status of all active contracts. These reports are sharable both internally and externally, reducing the amount of manual work required to communicate status to stakeholders.
Customization
When it comes to Contract Lifecycle Management, one-size-fits-all solutions aren’t likely to work. That’s why it’s important that CLM tools are highly customizable and flexible to the needs of different teams.
For example, a small company may only need a single legal team member to review contracts and sign them off on behalf of the business. But as companies grow, it’s common for different departments to need to review or approve parts of a contract, and that requires the ability to customize approval processes for each department. CLM systems allow for custom workflows and notifications based on the roles of different users.
After the contract is executed, a key component of CLM involves monitoring contract performance with an advanced risk model that analyzes internal data and external sources like D&B or Thomson Reuters to identify risks. Then, users can use a configurable dashboard to see how the contract is performing and to spot potential risk issues before they become bigger problems.
Whether you’re managing standard agreements or heavily negotiated contracts, it’s crucial to stay on top of deadlines, compliance standards, and other important parameters. CLM software can help ensure that nothing falls through the cracks by offering automated key date and task alerts, configurable dashboards, and user-friendly signing and document collaboration tools. These features make it easy to manage contract obligations and compliance, so that you don’t get hit with penalties for missing critical deadlines or lapses in contracts with vendors or customers.
