How many times have you run into misunderstandings with your clients over the terms of deals? Like you thought you agreed on A, but they ended up delivering B.
Transaction mix-up is a disease that has plagued the B2B industry for many decades. And you know what the major culprit is? Manual contract creation!
Creating contracts based on verbal agreements or paper documentation is flawed. So modern businesses now use automated contract management solutions instead.
A real-life illustration exposing the flaws in manual contract creation processes
Assuming two companies enter into negotiations over the execution of a project. Then one party drafts a paper contract and sends it to the other. But the receiving party – unsatisfied with some of the terms – requests that some changes be made.
Logically, a new contract draft would have to be made. If this back-and-forth negotiation process continues for long, we would inevitably have so many contract drafts on our hands before a final agreement is reached.
Now, imagine one of the companies assigns multiple personnel to handle their contract negotiation process. Having created so many drafts, some of the working personnel might get confused as to which draft is the final one. And might even end up executing the project based on an already discarded draft.
This is why automation is a no-brainer in any contract creation process.
7 reasons to automate your business contract creation process
1. It guarantees better contract creation
Unlike paper or verbal contracts, you can easily create automated contracts over pre-existing templates, share with team members digitally, and permit anyone anywhere to edit.
To break that down a little further, when you automate your contract creation process, you enjoy the following benefits:
- Easily create contracts using the contract management software (CMS) templates. Be it contracts between your company and a website developer, a writing agency, a social agency, or a material supplier, there’s a template for everyone.
- Send, edit, and manage contracts with clients or team members remotely (over the cloud)
- Enjoy uniform formatting, styling, and clarity across all your contracts. This ensures that all your contracts reflect your brand identity.
2. It eradicates any possibility of confusion during the negotiation phase
If you like, make thousands of adjustments to your contract drafts during the negotiation phase, an automated contract software will segregate each version of the draft in real-time.
In other words, as soon as you create a contract draft with the software, it gets stored on the cloud. Now, if you or the other party makes adjustments to the draft, the system simply creates a new version reflecting the edits and stores previous versions.
This way, both parties can see the evolution of the contract drafts in real-time. And can spot which is the final contract and which is not, thus, eliminating confusion.
3. Better contract management
It may be easy for a company with three to five contract relationships to manually manage the terms of their agreements. They can easily assign someone who’ll be monitoring the progress of each arrangement.
But for a company with hundreds of contract agreements, there’s really no way manual operations will work. You need an automated system that can help you track each individual contract for details like
- Deadline missed or reached
- Payment due or missed
- Tasks completed or abandoned
- Clients adhering to agreements or deferring from them.
4. Easy task comprehension
Most contract management software don’t just focus on contract creation only. Many of them extend their services into task management, too.
For example, after creating your contract, a CMS might help you classify all the necessary tasks involved in the project in a single location. Not only will this allow administrators to make multiple approvals at once, but it will also ensure that everyone is clear on their duty in relation to the project.
5. Accelerates approvals
With the integration of e-signatures in most contract management software, it is now easy for the various parties involved in a contract creation process to append their signatures from anywhere in the world.
In the past, getting contract documents across to the right desks to be signed often slows down projects. But with contract automation, businesses no longer have to wait to get their contracts approved.
Once done, simply forward to the right approver to append their e-signature, and everyone can begin work.
6. It eradicates all forms of management errors
As soon as a contract is declared “good to go,” a CMS tracks all the vital details associated with it.
It tracks details like deadlines, payment dues, who’s on what tasks, renewals, upcoming tasks, etc. The idea is to keep sending every participating party a notification alert so as to avert the possibilities of missed deadlines, missed payments, or unfulfilled contract terms.
7. Easy contract search
Anybody who’s ever managed a paper-based contract will agree that it’s so tedious reading through an entire contract document for little details like “deadline,” “agreed amount,” or such other terms.
In contrast, when you use an automated contract software to draft your contract, you can easily search for anything you want in the contract without reading through the whole document. Just enter a relating keyword, and the system algorithm will do the rest.
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Interesting related article: “What is a Contract?”