Contracts play an important role in governing the daily operations of a business. These legal documents help improve communication, boost workplace productivity, and maintain external relationships. However, contract management can be a time-intensive and paper-heavy process, making it important for businesses to invest in contract management software.
A single legal or negotiation misstep could result in loss of revenue, higher expenses, non-compliance with the terms of the contract, or event litigation by the contracting party.
Here are six common pitfalls contract management software for business will help you avoid.
1. Human Error
Any errors in contracts during the creation process can have serious implications. Such mistakes may not only lead to a lack of clarity but may also cause a misunderstanding of key elements and clauses within the contract. From contract management software market guides, it’s clear that this category of software will ensure that documents are easily and compliantly created. The result is that the parties involved will have a proper understanding of the agreements before signing the document. Using contract management software for small businesses and large businesses alike will help eliminate the chances of human error.
2. Prolonged Negotiations
One of the complications associated with the contract management process is extended negotiations. The delays that occur due to manual contract creation can result in lost revenue, high costs, missed opportunities, and frustrations for both parties. A contract management system (CMS) will help remove red tape by allowing you and your counterparty to negotiate the contract in real-time and ensure seamless contract lifecycle management. This is particularly important for sales and procurement departments, where procurement and contract management software will save you valuable time.
3. Missed Business Opportunities
Every business strives to take advantage of revenue opportunities while managing expenditure effectively. A contract tracker will help you identify any redundant and under-performing contracts so you can prepare a stronger negotiation platform for other opportunities. While some businesses use Excel spreadsheet templates for tracking, contract management software offers more advantages. Unlike performing contract lifecycle management in Excel, contract management software lets you access the documents within seconds and notifies you of important milestones and dates through proactive alerts. With the pitfalls that contract management software can help you avoid, any business that is still managing contracts using Excel should consider investing in a new platform.
4. Poor Record Management
Among the most important contract management software features is the ability to simplify record management. A program that is designed to organize contracts does the job in a way that even the most sophisticated email inbox cannot. Contract management functional requirements include automatically notifying record managers when a contract is about to expire so that it can be earmarked for renewal or automatic archival. Be sure to have a comprehensive contract management system requirements checklist in your evaluation process that includes convenient storage and retrieval of contract documents. In this way, you will access the documents in mere moments in case of a misunderstanding and track them to identify what’s worked and what hasn’t.
5. Lack of Accountability
Contract management software makes it possible to access the documents from any computer or mobile device. By being able to view the contracts at any time, there is likely to be improved accountability over conditions and stipulations. The program ensures that customers can access contracts on the same day that they wish to request the related product or service, eliminating any confusion regarding the conditions of purchase. Today, when evaluating different contract management systems, it’s important to keep the vendor accountable too. This can be done by seeking out third-party opinions like those of bigger companies like Forrester and Gartner, or through smaller organizations that are more focused on user reviews like G2. There, you can make better purchasing decisions by reading unbiased insights and comparing features of different programs, compared to Forrester and Gartner whose list only includes companies willing to pay to be on the list.
6. Low Productivity
With contract management software, the process of reviewing and approving contracts is much faster. Rather than delivering a hard-to-sort stack of paper via a courier service, the recipient will be able to review and sign the contract from any mobile device. The fact that this can be done even when the recipient is out of the office helps to boost productivity. Today, government contract management software is used to eliminate bottlenecks and decrease contract processing time. However, just like with small businesses, federal contract management software should have the features required to meet current needs effectively.
In order to enjoy these six benefits, it’s important to choose the best contract management software in 2020. You should ensure that the application will meet the unique needs of your business, which means identifying some of the most reliable contract management companies and looking for contract management software attributes that will promote efficient operation and contribute towards growth.