If you own a business, you already know that contracts are vital. For your company to have value and for it to survive, it must have contracts in place. This being the case, you want to make sure that all contracts are up to date, valid, and protect your company. Contract management systems are an excellent way to stay in full control of your business and its contracts, giving you the chance to create or modify contracts when it is necessary to do so.
A contract management system is a way to handle all of your contracts using a digital system. It can help with every stage of a contract, from its creation and term negotiations, right through to its termination in some cases. Having the contracts stored in a digital capacity makes it easier for you as a company to see your data as a whole and see how you are benefitting from the contracts you have in place.
For some businesses, for example a law firm, there are files upon files of contracts and paperwork to be sifted through on occasion. Having all of this in digital form is a much quicker and easier way to store it. It keeps everything in one place and easier to access.
If you only deal with a couple of contracts a month, you may feel it is unnecessary to go digital with your contracts. However, there are still benefits for all. It is efficient and safe. But for some businesses, they may be dealing with thousands of contracts each and every month. To have a process that automatically deals with all of these contracts is faster, it is cheaper, and it is much more efficient.
For those business that are dealing with such a high volume of contracts, it is especially important to use a contract management system. When so many contracts are being handled manually on a daily basis, mistakes are bound to happen. And as we all know, mistakes on a contract can have massive legal ramifications. Not only that but think of the time being wasted by doing each contract individually when there are so many to get through. Other problems that it can cause include problems within your own company between different teams if a good system is not in place. In can mean the difference between a deal being closed or not. If things are not managed properly, vital information might get overlooked, an important date or deadline may get missed. Having a contract management system digitally taking care of everything for you eliminates all these problems.
There are different stages to the process of contract management and each stage is easier for you and your business if you go digital. Let’s see how.
The number one stage with a contract is to create it in the first place. If you are doing this yourself, you will probably sit at your computer with a Word document, writing, deleting, re-wording, and re-reading it over and over to be sure of what you are saying. Or maybe you have some old contracts around that you will dig out or search through on your computer files. You may use these as a basis, maybe copying and pasting and then making a few tweaks. This all takes time and can lead to mistakes being made as each stage is a manual process. But by using a contract management system, you can create your own templates for your different types of contracts. It can be updated as often as you need so people using these contracts will always have access to the latest, relevant contracts that apply to them. This leaves little room for error so mistakes are minimal to non-existant.
Sometimes a contract may involve different parties, or even different teams within the one company, but that work in very different locations. Some contracts are made between people on opposite sides of the world. What a long, drawn-out process it is to get these contracts finalised and approved by all parties when it involves paper copies being sent from office to office, country to country. How much easier to use a digital contract than can be accessed by everyone, no matter what office they are working in or where they are in the world. You can even have everyone looking at the same document at the same time, from all their various locations.
Obviously, a big part of developing a contract is the negotiation stage. How a contract looks to begin with is rarely how it will end up. Again, this is a long and drawn-out process if you are backwards and forwards between all the parties involved, constantly making these adjustments, sending over the revised copy only for it to be reviewed and more changes requested. The amount of paperwork sent from place to place, or the number of emails bounced around can be overwhelming and endless. But if everyone has access to the contract at the same time, even if they are not together, a lot can be worked out between parties right there and then. Adjustments can be agreed at the touch of a button.
A crucial step in any contract is getting the contract signed. Again, with paper copies, this can take a while. Papers may be shipped all over the world to get all parties signatures on that piece of paper. This can take time and costs money. But if everyone can access the document at any time and add a digital signature, the speed at which the contract can be processed has just been greatly increased. No time will be wasted, and it is much more cost-effective.
Once the contract is created, if you have done it manually, a paper copy is likely added to a filing cabinet, that sits in a row of filing cabinets, making it a lengthy process whenever you need to find the file again in the future. Not to mention all the space those filing cabinets are taking up. You do not have relevant data to hand and would have to go searching through files each time you wanted to figure anything out. With a digital system in place, everything is accessible at the touch of a button and data is already collated for you so you can keep track of all your contracts and their progress at any time.
As you can see, there are many benefits to using a contracts management system for your business so if you haven’t already, get set up with one today.
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