How to Improve the Contract Management Process?
Did you know contracts dominate 70- 80% of your business?
46 cents out of every $1 spent on legal services goes on external costs!
The contract management process is vital for businesses to survive and grow. Companies can save up to 2% of their total annual cost by using advanced contract management software, but more importantly helps manage operational and financial risk. Hence, it creates a need to improve the contract management process. For example, automating contract management helps:
- Decrease negotiation cycles by 50%
- Trim incorrect payments by 75 to 90%
- Reduce operating & processing costs of contract management by 10-30%
- Reduce Operational and financial risk
Automation is just one method to enhance your contract management process. There are many ways to improve your contract management process:
Standardize Allowable Contract Clauses Setup
Effective contract management supports the legal department by pre-approving and standardizing potential legal terms. Many businesses use a standard set of terms and conditions and legal languages for a large set of contracts. Such practices reduce the review time where Contract analysts only attend to exceptions and the sales team can focus on pricing proposals.
Set Contract Management KPIs
Defining contract management KPIs give visible goals to your business. Organization leaders find it easy to build practices with such goal visibility. Additionally, the unmet KPIs reveal productivity concerns leaking costs.
Harmonize Storage Security and Visibility Needs
A core objective for contract management to keep sensitive documents safe while ensuring quick and easy access to contracts. A secure storage system with user profile and permissioning is a proven solution to meet this approach. Such a centralized system streamlines organizing contracts without complicating user access..
Automate Contract Communications
Are you still emailing multiple contracts back and forth? This is costing you time and money. If you use a central and cloud-based repository, it will enable you to access contract files for multiple points of contracts at the same time. All parties can access the same version quickly and it makes collaborative discussions easier. It also enables you to set automated alerts to the responsible parties to review the contracts.
Businesses should make financial metrics as a committed part of their routine review. Include the finance department on regular schedules to compare the budget expectation and contract performance of your organization. More informed negotiations, lower incidents in auto-renewal of contracts, and better supervision of contract performance cut down your unnecessary expenses.
Conduct Routine Compliance Reviews
Compliance is another essential area to check on your routine contract review. You need to review federal, state, other legal regulations, and compliance to the contract to ensure zero breaching of compliance. Incompliance could result in loss of business license.
Use Contract Management Automation for needs of Business Growth
When your business needs change, so do your contracts. . When you build contracts, you must view and predict the demands and capacities of your organization. Making a plan is essential to address upcoming changes. Such strategic contract planning also helps to manage issues like ‘Scope creep’- refers to how the requirements of projects tend to increase over a project lifecycle.
Read here to understand why contract management software is important to compliance.
Improve your Contract Management Process with our expertise
We at CommerceCX are CLM experts to improve your contract management process with an advanced CLM (Contract Lifecycle Management) process. Our experts help in contract creation, execution and analysis to maximize operational and financial performance at an organization, all while reducing operational and financial risk.
Our CLM process calibration includes:
- Contract Creation and Negotiation: Contract creation, execution, and analysis to reduce risks.
- Document Generation: We use the latest technologies to automate and configure documents and templates to seamlessly generate, negotiate, redline, and check-in/check-out all contract-related documents.
- E-Signatures: We help you implement e-signatures as a secure and accurate identification method and providing signatories a seamless transaction.
- Renewal Management: Our CLM experts help in contract renewals to maximize future revenues effortlessly.
Talk to a CLM expert today.