Any thriving business requires contract management processes. With it, you increase efficiency by ensuring that everybody delivers work on time, you fulfill your company’s commitments, pursue potential revenue streams, assess legal and economic concerns, and so on.
Unfortunately, recognizing warning indicators are a frequent oversight for many managers. When your contracting processes are ineffective, issues will inevitably arise.
Here’s how to know if it’s time to review your contract management processes:
Speed and Control Become Mutually Exclusive
Your legal team thoroughly reviews each transaction, and lawyers understand that even minor mistakes can significantly impact the conclusion of a contract. On the other hand, your sales crew is more focused on closing deals as rapidly as possible to earn commissions, close contracts, and contribute to business growth.
Problem: Contract conflicts may arise as a result of inconsistencies between legal and sales personnel.
Solution: Use contract management software to ensure that each sales transaction begins with a legally approved template. If the contract text changes, the computer can notify legal staff. If no revisions are made, the contract can be signed by the legal team.
Manual Processes Bottlenecks Expansion Efforts
Manual procedures allow for human error, insufficient process controls, and contract cycles that are excessively short. Minor delays can result in a late contract, a botched delivery, or a faulty quota.
Problem: Contracts, or email-based processes, may suffocate business expansion.
Solution: Automation removes pain points and establishes a straightforward contract management approach. Contract management software’s efficiency stems from electronic workflows that adhere to the same criteria as traditional manual operations.
Modified records and approved data entry are used to generate an automated data contract. This avoids the need to re-enter data manually and provides for data validation during the contract review process.
Information Visibility Is Hampered by Silos
Information silos emerge when departments do not share information. Even tiny businesses with multiple locations struggle to share information. When a firm expands to various cities, states, and nations, the problem becomes more complicated.
Problem: Silos form and restrict growth in the absence of a centralized contract management system.
Solution: In using a contract management system, all contracts for all departments may be centralized and accessible only by departmental security. Contract expenses, sales revenue, and risk variables can all be electronically linked into reports to provide a full assessment of contractual performance.
Inconsistent Legal Language Necessitates Additional Review
Contracts are well-examined legal documents that outline all parties’ responsibilities, but inconsistent language necessitates numerous re-examinations of contracts and provisions, significantly as your business expands with new employees. This slows the process and impedes the growth of your company.
Problem: You’re not sure if you have a contract language problem.
Solution: Use a contract management system with templates for each contract type and text that your legal team has reviewed. Additionally, hire a lawyer to analyze clauses before the contract may be executed.
Contract Modifications Fall by the Wayside
Contracts can change during and after negotiations. This means that growing businesses may require effective change management strategies. Contracts and the number of people authorized to sign them are expanding, whether in sales, procurement, licenses, or acquisitions.
Problem: It is a significant business risk to impede the complete investigation and recording of contracts and contract changes.
Solution: A contract management system centralizes contracts and tracks modifications in three ways. Version control allows changes to be tracked within a document and across versions. Automated redlining can reflect changes made during negotiations.
Lastly, using contract-centered storage can link a master agreement to any amendment or order modification. All these advise all departments about changes, new requirements, or time limitations.
Procurement Pace Doesn’t Meet Demands
Businesses require raw materials, components, professional information, related services, offices and infrastructure, finance, advertising, etc. Contracts are used in procurement to obtain these things at a low cost.
As the company expands globally, more arrangements may necessitate more sophisticated terms to manage purchases over more extended periods.
Problem: In a developing company, managing additional contracts may become a hurdle.
Solution: Using a contract management system can streamline contract forms and conditions and legal terminology ahead of time. This allows businesses to purchase products fast.
With this, the entire organization can access major purchase agreements, improving consumer awareness of discounts and delivery terms. If a supply chain component fails or is at risk, the system can discover alternate sources for crucial resources.
One of the essential features found only in contract management systems is the discipline enforced on all contract operations of a growing firm. So, as you expand, keep the bigger picture in mind.
All businesses demand efficient contract cycles to complete agreements and increase revenues. If you notice these warning flags, you should look for contract management software that simplifies and streamlines each phase.
Are you looking for a reliable contract data management system? Anapact integrates your entire team when it comes to each pace of a contract change. Your business can expand with zero risks and full compliance through our simple, scalable, and fairly-priced service. Book a demo today!