5 Ways CLM Software Can Help with Contract Negotiation and Approval
Contract negotiations and reviews are stressful, time-consuming, and require a high level of accuracy during every step of the process. Even for industry professionals, the initial stages of negotiations and redlining of contracts remain a critical task with input from multiple stakeholders. When these agreements influence the entire organization, the required effort increases exponentially.
In situations like this, using contract lifecycle management (CLM) software can assist legal teams to coordinate the entire process and ensure accurate communication between all the parties involved. During early negotiations, contracts will go through multiple edits and reviews to ensure the language is precise, clauses are technically correct, and the assigned responsibilities are mutually agreeable.
How Contracting Software Assists with Collaboration and Redlining of Contracts
The initial negotiation stages of the contract lifecycle require all parties to the agreement to be in the loop, including all their stakeholders and technical experts. Ensuring you have an efficient process will depend on the technologies and tools you use to streamline all communications and updates to the final agreement.
While there are many pitfalls in contract management, a CLM solution can reduce the burden on your legal team and help you keep track of all your agreements. The final version of the document will depend on input from a variety of resources based on the majority of feedback received during the negotiation stage of the life cycle. This process aims to clarify all responsibilities, transfer risk appropriately, and define clear expectations for all parties to the agreement.
Here are five ways CLM software can help you collaborate and negotiate including redlining contracts, keeping track of all the changes, and ensure you are always working on the latest version of the document – without ever having to filter through your emails.
1. Control Document Versions
To access the latest version of the contract, teams should not have to search through their emails. Lengthy search and retrieval of documents will slow down the process and could lead to errors in communication, compromising the accuracy of the final document.
Access to a centralized database of all your contracts that includes version control is the best way to manage all your agreements. For any organization, being able to file agreements by status, vendor, agreement type, contract manager, or any other criteria makes it easier to retrieve, review, and approve your documents.
Instead of sending emails back and forth, your contract managers and legal department appropriately access the repository, which serves as a single source of truth, to ensure the accuracy of the final agreement.
2. Retain Edit and Change History
Retaining all previous versions of a document requires additional storage. Using emails, shared drives and spreadsheets, or even on-premises infrastructure to maintain all these copies of documents isn’t efficient. In some cases, resources may delete old versions and that puts your compliance procedures at risk.
A cloud CLM platform with integrated collaboration and version tracking ensures you can centralize your process and retain all the history relating to a specific document. When resources make changes to the document, the system will capture all the versions and give you the ability to review all changes made during your negotiation processes.
3. Streamline Drafting of Agreements and Contract Preparation
Contracts often contain complex requirements and specifications. Getting the language right during the initial draft requires multiple interactions between technical experts and legal professionals. Trying to manage these interactions using emails and other communication tools will slow down the process and ultimately, influence the accuracy of the final version of the document.
CLM software allows you to add internal and external resources during the negotiation and redlining processes. As the system will record all the input under the specific resource’s identity, everyone will stay in the loop regarding any required updates, helping manage the expectations and responsibilities from a variety of contributors.
Contracting software enables organizations to manage all the input and updates required from technical resources as well as the contractor’s experts.
4. Fast-Tracking Contract Preparation with Clause Libraries and Templates
To get the first draft to your larger team, you probably have a library of clauses and document templates. If you’re managing your templates and clauses manually, the time it takes to prepare the first draft of the agreement will be excessive and add additional overhead to your CLM process.
Generating contracts with CLM software that gives you a template and clause library can speed up the process while ensuring the accuracy of your approved language. You can deploy different templates and clauses to make your initial draft process quick and easy. It’s also possible to capture specific contract-related information (to auto-populate the templates) and establish clause rules based on what template you select.
5. Collaborate Efficiently and Maintain Your Audit Trail
With multiple stakeholders involved, CLM software that includes collaboration tools and a complete audit trail allows for constant improvement of your processes. The detailed history of edits, review comments, and document approvals helps your team to streamline compliance tasks with internal policies, external regulations, and information security laws, and also helps you get to revenue faster.
Clear communication and collaborating regularly depend on a complete contract management platform that provides you with specific features designed specifically for these tasks. Speeding up the contract preparation and negotiating process without compromising on accuracy in CLM is as simple as creating a collaboration room and inviting the resources to participate in reviewing, redlining, and approving different sections of the agreement.
Introducing the Collaboration Room from Contract Logix
To assist organizations with end-to-end CLM, Contract Logix is happy to introduce our new Collaboration Room. Once you want to add different contributors to your contract negotiation and review process, you can create a collaboration room and add participants as required. The collaboration room will capture all history, including the comments from internal resources and third parties.
With an intuitive user interface, a cloud platform, and a historic record of all edits, redlines, and comments during the negotiation stages of your CLM, you can ensure compliance throughout the process. Contract Logix will help you fast track your contract generation, review, negotiation, and approval steps during your CLM. Once you approve the final version, all parties will receive a notification and the execution phase can start as per the agreed schedule.
To see how Contract Logix can speed up your negotiation processes and the redlining of contracts in your CLM using Collaboration Room, request a demo today.