Contract Lifecycle Management (CLM) is an automated system that streamlines contract processes, such as initiation, authoring, process and workflow, negotiation and approval, execution, ongoing management, contract compliance tracking, and contract renewal during their critical stages.
Contracts can become challenging to manage. However, due to the emergence of contract management software, companies can now track every stage of a company’s contract compliance activity. As a result, contract management becomes more straightforward—producing nothing but excellent results.
In effect, companies can monitor how every contract spends, become efficient, and eventually lower costs. But how else can CLM software contribute to contract compliance tracking?
1. Initiates Proactive Contract Compliance
Contract compliance management is a collaborative process that requires various inputs from multiple experts in every stage of the drafting and negotiation system. Businesses can use their in-house core members to pre-draft the compliance clauses and put them up according to category, industry, or department, depending on how the company functions. The in-house core members should determine and include all compliance requirements in a clause library by maximizing collaborative efforts.
As a result, CLM software pushes companies to manage their contracts efficiently and effectively. Therefore, people working in the company can generate new agreements based on templates submitted by the core group, bringing quicker turnarounds depending on the legal clauses available to the operational teams.
2. Sorts Templates for Standard Compliance Needs
Every company follows its standards in various scenarios, including the organization’s internal procurement processes. Through CLM software, firms can set a specific standard and have everyone use the template for further transactions. As a result, everyone within the organization remains on the same page while using a standard established for uniformity.
However, updates may be necessary from time to time as some inclusions are bound to change. But at least, the company stays aligned from top to bottom on which standards they should use in transactions involving contracts. Programming CLM software is also easy, making work seamless and free from error.
3. Focuses on Mandatory Legislative and Regulatory Agreements
The current laws aren’t absolute and permanent. There may be changes and updates and new policies and regulations published by the government now and then. By creating a contract database, companies can monitor the existing laws in an area in real-time and update whichever has changed.
However, companies should also be responsible for letting everyone know who is a part of the contract and ensuring they align with the current changes. If not, there may be issues moving forward that can disturb the harmony provided by CLM software. As a result, managing existing laws and changing them once in a while should help businesses dodge increases in costs due to fines or corrective actions.
4. Helps Keep Track of Contract Finances
The budget is the most crucial part of a contract. Failure to manage or use it correctly should result in additional costs and terrible team performance. Therefore, it should be a priority for all firms to find a way to monitor their budgets for every contract.
Using contract management software should help them follow every contract and monitor their spendings to ensure they stay within the budget. As a result, finances should stay on track, and businesses can avoid overspending on specific projects.
5. Improves Communication Between Parties
Lastly, compliance tracking benefits companies by ensuring that communication is present for all parties involved in a contract. Establishing a system that updates people on the contract’s progress is an excellent way to stay managed at all times. As a result, the contracts should end without encountering any bump along the way.
The use of contract management software has become helpful for most companies in any industry in need. It is challenging to track multiple contracts at once; getting an overview of a contract’s status per stage is a game-changer in business. Overall, organizations that are still using traditional methods of contract management are missing out in the competition.
Anapact understands the need to manage contracts properly. Through our NetSuite contract management software, our goal is to help our clients build a reliable contract database that allows them to keep track of transactions all the time. Work with us today and see the results tomorrow!