7 Important Benefits of Contract Automation
Anyone who manages contracts regularly, especially those using manual processes, can benefit greatly from automating the contract management process. Contract automation helps organizations of varying sizes and industries streamline their processes, restore order to their workflows, and gain control of productivity.
- Contract automation more efficiently manages formerly manual contract workflow
- Contract automation streamlines the contract process, restores order, and provides automatic notification of upcoming deadlines
- Contract automation uses preapproved libraries of clauses and templates to ease contract creation and standardize contract language and clauses
- Contract automation uses e-signatures to speed contract execution and restores control over the entire process
What Is Contract Automation?
Contact automation leads to more efficient contract management. It turns the formerly manual contract management process into a smooth and easy-to-navigate operation.
Businesses can automate virtually every aspect of the contract process. Organizations can use contract automation software to request, create, approve, negotiate, execute, and archive contracts more easily. The result is a more efficient contract workflow, fewer errors, and a speedier process.
For example, consider a company with a bevy of contracts with multiple sales channel partners but has not yet automated its approach to contract management. If the organization still uses manual, paper-based methods, its vital contracting process is likely to be marked by costly confusion, inefficiency, and mistakes.
With manual contract management, any or all of the following are likely to occur:
- Revisions are not controlled
- Staff often use outdated templates and nonstandard language
- Contract routing is haphazard
- Contracts are apt to languish on people’s desks
- Critical milestone dates go by without alerts.
Automation mitigates all those issues because it allows for better process control and reduces human error. Contract language is standardized, terms and clauses adhere to preapproved guidelines, and contracts always go where they’re supposed to go. Organizations of all sizes can benefit from automating all aspects of the contract workflow.
7 Essential Benefits of Automating the Contract Management Process
Poor contract management can lead to loss of revenue. The World Commerce and Contracting group estimates that poor contract management costs companies up to 9% of their annual revenues.
Gaining back at least some of this revenue loss is just one of the many benefits of contract management automation. Here are seven additional benefits.
Streamlines the Contract Process
Contract management automation software tracks and prompts necessary action throughout all stages of the contract lifecycle—creation, negotiation, execution, and compliance monitoring. The software prompts necessary action at the right time, countering human forgetfulness, miscommunication, and susceptibility to error.
Here’s how automation streamlines each stage:
- Creation—Centralizes the core documents and associated data, guides approval routing, monitors progress, sends email status alerts, and allows for quick searching of contracts.
- Negotiation—Automatically flags and alerts the necessary people about important dates related to negotiations, such as when a revision is due and notifies appropriate staff of upcoming completion dates.
- Execution—Ensures that all documents and data can be easily accessed. Change management features enable quick modifications while ensuring everyone is working with the latest revisions. Signing is made easier via e-signatures.
- Compliance—Monitors contract compliance to ensure that all parties adhere to contract terms. It also maximizes allowed revenue by alerting when penalties are due.
(The following video shows how contract automation software streamlines contract workflow.)
Organizations that still employ manual contract management often find their processes chaotic and inconsistent. One indication is that 90% of legal professionals have trouble locating individual contracts. That’s chaos!
Automating the contract process eliminates that chaos and restores order to the entire contract workflow. Contracts no longer get lost or misplaced, all documents are properly and promptly routed, and everything gets done according to schedule. The best contract automation software is easily integrated with your organization’s specific processes, contract types, and workflows.
Standardizes Language and Clauses
Creating a new contract shouldn’t be an exercise in reinventing the wheel. A library of preapproved clauses enables authorized personnel to draft contracts faster and more accurately. Some contract management systems go the extra mile by allowing drag-and-drop creation of contract templates using approved clauses.
Eases Contract Creation with Preapproved Templates
The automation of the contract drafting process doesn’t stop at clauses. It also includes the creation and storage of contract templates that serve as the base of all new contracts. Employing a library of predesigned contract templates takes all the guesswork out of the contract creation process.
Provides Alerts About Upcoming Events
If you are working exclusively with paper contracts, it’s possible, if not likely, that you will miss key contract-related events, such as renewals and reviews. Your staff manages hundreds of action items daily, and remembering a contract renewal date is often at the bottom of their list. Furthermore, your clients count on you to give them proper notice when it is time to renew.
You can easily remedy these issues by using contract management software to set automatic alerts tied to all the milestones of the contract lifecycle. By automating the process, you eliminate missed deadlines and dropped renewals.
Speeds Execution with e-Signatures
Quite often, the biggest stumbling block to completing a contract is getting the proper parties to sign the thing. Unsigned paperwork can language on a senior manager’s desk for days or even weeks if not properly shepherded.
Fortunately, more and more companies in North America are embracing e-signatures. This is especially true with contract automation software. Using e-signatures for contract execution results in faster contract execution and saves money in terms of shipping and printing costs. As an added benefit, you can significantly reduce your company’s carbon footprint by eliminating the need to ship printed contracts for signatures.
For any organization mired in manual, paper-based contract management that often is more chaotic than productive, contract management automation software delivers significant improvements and control over productivity and processes. Gaining control of the contracting process with contract automation software results in greater control of the bottom line.
With a flexible and cost-effective contract management solution, such as Contract Logix’s CLM Platform, there’s no excuse for continuing with archaic, manual contract management. Instead of limited management capability, you get full control over the entire contract workflow—and benefit from a much more efficient operation.
Choose Contract Logix to Automate Your Contract Management
When you want to automate your contract management, turn to the experts at Contract Logix. Our cloud-based CLM Platform automates the entire contract workflow, from creation to execution and archiving. Our CLM software helps you manage all your contracts, keep track of all deliverables, and ensure that your contracts comply with your company’s standards and industry regulations. You’ll save time and money by standardizing all your contract terms and language.
Contact Contract Logix today to learn more about how contract automation can benefit your organization.
Read another recent article from our team, How to Lead Your Industry with Contract Intelligence.