How efficient are your contract lifecycle management processes? According to Aberdeen Research, an average company takes about 20-30 days to create, negotiate and finalize a contract.
If you are looking for ways to shorten your contract lifecycle, it is time to consider contract automation. Through automation, you can cut more than half of the time spent on managing your contracts. Moreover, implementing automation allows you to reduce administrative costs by 25%-30%.
With so many benefits associated with contract automation, what exactly is this concept about?
Simply put, contract automation refers to the process of developing, managing, and storing legal agreements and documents online. This software allows parties with authority to create, edit and track the status of the contract process efficiently.
This week on the Contract Hound blog, we’ll be sharing some benefits of contract automation and how to streamline your contract workflows.
Benefits Of Automated Contract Workflows
Improved productivity and efficiency
Contract automation expedites workflows by ensuring that all relevant documents are readily available online. No back and forth communication is needed to locate the latest versions of documents, comments, and suggestions can be made within the platform, with an audit trail.
Required information fields are automatically generated, reducing the chances of employees missing out on specific fields and costly errors. Parties involved can access the contract on any device and provide comments. As a result, contract creation becomes much easier and faster.
Reduce risks with better visibility
You can share all contract documents within the same platform, allowing you to track contract changes confidently. You can also view the status of the approval process and who has access to the document.
This allows the company to track the state of the contract progress and identify if there are any internal process bottlenecks. Doing so helps the company target their process inefficiencies and optimize their contract lifecycle.
Increased security and compliance
Contract administrators can configure user permissions and limit access to confidential information. With standardized templates and clauses arranged beforehand, it reduces compliance errors and saves your legal team time.
Contract lifecycle management with a contract automation tool also alerts you to required changes and helps you keep up with renewal and payment deadlines. This allows you to avoid incurring expensive fines and penalties.
Automate contract drafting, workflows and risk mitigation.
Now that templates, documents, and contracts are up-to-date, this will encourage more efficient business cycles. Contract management improves communication and collaboration across departments.
Approval workflows are simplified, and the right stakeholders will be notified accordingly to take appropriate action. Your approval requests will no longer be lost in the sea of endless emails received daily and neglected.
Also, with the audit trails left behind, compliance management teams have clearer views of whom to approach if corrective action is needed.
Shorter contract management processes and improved customer satisfaction.
Contract automation removes the need for inefficient processes such as printing, scanning, mailing physical copies, etc. This shortens your contract lifecycle, leading to faster turnover, and results in more satisfied customers.
This can become a competitive advantage and drive stronger relationships with vendors and clients. Your employees will also appreciate automating the contract management process as this will save them from paper chasing and running after others for signatures.
Which Departments Benefit From Contract Automation And How?
The benefits of contract automation can be enjoyed throughout the organization as a whole. However, these are some departments that will reap the most significant benefits from automated contract workflows.
- Legal department — Contract templates can be drafted in advance, so contract terms and wording can be standardized. With lesser documents to manage and be involved in, the legal department will have more time to handle other critical legal tasks.
- Sales department — Sales teams can obtain greater independence in drafting contracts with contractors and vendors. With pre-made vendor contract templates, they will not need to keep seeking approvals from the legal team, speeding up the contract process.
- HR department — With a centralized platform, this streamlines communication, so nobody is left out of the loop. It also saves time and creates a digital trail.
- Administrative department — Time-consuming tasks such as manually keying in contract information, filing of contract documents, etc., will be eliminated with contract automation.
- Finance department — Provides finance teams with better leverage to oversee and manage the business’ high-revenue deals. As contract details can be updated in real-time, time and resources can be better utilized towards serving the firm’s most valuable clients.
Streamlining Your Contract Automation Workflows
Contract automation helps to streamline each step of your contract management lifecycle for efficiency. With a contract management tool such as Contract Hound, this is how your simplified contract management process will look like.
Step 1: Create contract templates
Your legal teams will first have to spare some time creating templates for the various contract types there are within your organization. Once these templates are created and stored within the platform, they can be easily organized into folders and shared with everyone.
Templates make it simple for employees with little knowledge of legal terms to easily fill in relevant information and easily create contracts. This shortens the contract creation process.
Version control also helps ensure that the right version of contract documents or templates is always being referenced within your organization.
Step 2: Approve contracts
Once contracts are uploaded, you need to notify the relevant personnel in charge to approve the contract. Within Contract Hound, you can send approval requests and view the status of the approval workflows on the dashboard. Additionally, employees can chat about the contracts and send documents freely within the platform.
By setting up an automated approval workflow, those involved will be notified instantly, saving you time and reducing delays between approvals. Employees can also find out at a glance who has access to the document.
Step 3: Sign contracts
E-signatures are now recognized worldwide as legally binding. With the integration of DocuSign within the platform, contracts can be signed conveniently on the go. It removes the need for printing before signing, saving both time and resources, especially when cross-border deals are made.
Contract automation removes these inefficiencies and ensures a smoother process within your contract lifecycle management.
Step 4: Archive
Aren’t you tired of having to file each contract and its supporting documents manually? What’s worse is having to sieve through all the files before locating the document you need.
With our cloud-based contract repository, this manual task is no longer an issue. Using smart search and filtering features, you can easily find the documents you need. You will spend less time sourcing for what you need and more time on the actual task.
Step 5: Monitor contracts
Contract monitoring is an ongoing process. Each contract has its own renewal and expiry dates, which may be challenging to keep up with. We have a smart reminder feature that allows you to set notifications for key milestones in advance, so you will not miss out on future dates.
This eventually saves your company money by preventing overspending, accidental and delayed payments, late renewal penalties, etc.
Features To Look Out For In A Contract Automation Tool
- Centralized platform — A centralized platform can also act as a contract repository such that your employees no longer need to fuss about not being able to locate contracts and documents.
- Scalability — Opt for a cloud-based platform that teams can easily use with an Internet connection. Make sure that the platform has workflows that will help you streamline your contract management processes as you scale in volume and complexity.
- Simple user interface, easy to navigate — You won’t need to spend additional resources to teach your employees how to use an online tool if it is intuitive enough. Moreover, you don’t want your employees to avoid using the software after you have paid for it just because it has a complex interface.
- Able to set notifications and reminders for key milestones — Help departments keep track of deadlines and avoid breaching contractual obligations. Customizable alerts for each team to determine when, who, and what format they should be sent in.
- Able to view and edit status updates — A bird’s-eye view of all contract approval workflows will be helpful for management to determine pressing issues, where to focus resources on, and plan for upcoming projects.
- E-signature integration — Convenience. This is a must-have. All you need to have is internet access, and users will be able to sign contracts anywhere, anytime, without the need for a printer and pen and paper.
Convert your traditional contract management workflows into an automated one with Contract Hound.
Contract automation can become a competitive advantage for your business and drive greater work productivity and performance. By reducing the amount of time your employees spend on contract management tasks, they can concentrate on higher revenue-generating activities.
Choosing to adopt a contract automation tool will also help improve your data security and compliance, protecting you from potential security breaches and cyberattacks.