Every contract your company has – even those with customers still in negotiation – will impact the bottom line. In certain sectors, contracts can make up the majority of the value of a company. However, many companies do not control their contracts to maximize the maximum value. Indeed, recent research concluded that bad policies for managing contracts could reduce the value of a contract by anything between 17 and 40 percent.
Think about how our business manages its contracts? What are we doing to maximize value throughout the lifecycle of a contract? Are you strategically using your contracts? Do we know the location where contract documents are and what stage they are in their existence? The chances are that the answers to these questions lead to a particular conclusion that managing contracts aren’t working.
Even the contract lifecycle management procedure is satisfactory, and you’re actually managing your contracts, rather than just storing them, there are signs that your method may need to be improved, and investment in a more efficient online contract management software is essential in particular if any of these issues are familiar to you.
More Deadlines Missed, More Often
Renewal dates as well as deadlines are crucial aspects of a contract. Suppose you are relying on a system or software to manage the entirety associated with your contract. In that case, they need to prevent any unfortunate circumstance that may arise because of the failure to meet a deadline or renew date.
You require an accurate and complete notification service. Beyond the usual notifications, it is crucial to develop custom notifications for various reasons. This allows businesses to be aware of the most important actions they must take immediately. If your software isn’t performing this right now, you should consider it as a signal.
The Process of Contracting Can Take Forever
In the process of drafting contract agreements, does your organization slower than molasses during winter? Do you find that requesting even a basic contract, such as an NDA, can take up to several weeks or more? In the same way, making sure that the contract is in order and that all required departments have ratified the language and the terms are crucial; you don’t often have enough time. There may be a need for an NDA to a prospective customer or investor; as an example; however, if you need to wait ten days to receive it, you may miss out on the chance. Implementing a contract management system that allows self-service contracting through an easy wizard interview and templates can speed the process. This also ensures that contracts are secure, legal, and supervised through your department of legal.
Slow Execution of Contracts
It can take between 20 and 30 days for an organization to draft, negotiate and then execute a contract. However, if your contracts seem to be stuck during negotiations or you’re having difficulties keeping up with the volume of contracts, the duration of the contract could be longer. This is a sign that it’s time to move to CLM.
Processes that are slow to contract have the effect of a domino effect. When a contract is delayed in the first stage, it delays the timetable for each subsequent stage. The more sluggish your procedure is in, the longer it ruins relationships with another side and hinders your ability to bring income in fast.
Innovative contract management tools can cut your contract’s life cycle by introducing self-service features, streamlining workflows for approval, and integrating with tools you utilize daily. Additionally, with electronic signatures, Third parties can secure sign contracts on any device inside the system — there is no need for a separate application.
Unsuitable Management of Sensitive Contract Data
Data is a precious and important factor when making business-related decisions. Companies are spending a large part of their budget gathering data to make decisions and take actions that allow them to remain effective and efficient across all aspects. In this scenario, companies should make use of their data effectively and secure it.
You Are Not Privy to Your Contracts
Do you have a complete idea of the risk your contracts pose to your business? Are you able to identify which contracts have particular clauses or conditions? Most of the time, looking over contracts to find specific terms will require months or weeks of manual labor, in which your legal staff looks at each relevant contract to determine the needed details.
This can be costly as well as time-consuming and susceptible to omissions and errors. With a contract management platform that incorporates AI-driven insight, you can quickly analyze your contracts and gather essential data in just several clicks, allowing you to extract the maximum benefit from your contract.
Final Words
Certain companies have dozens of contracts to manage, and some have thousands of contracts. And during contract negotiations, some contracts may require multiple approvals from departments and others just one. All of them can benefit from the contract lifecycle management solutions and the reduced risk and speedier contract execution that they provide.
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