Contract Management and Automation Software Beginners Guide


Basics of Contract Management and Automation Software

 


 

Contract Management and Automation Software Beginners Guide

Introduction

Contracts are a representation of the obligations and rights to be delivered to a person over time although people only sign them once. It is, therefore, important to manage them so as to ensure they are doing exactly what they were meant to do. Contract Management entails checking if the contract was structured in the correct manner and if it is reviewed correctly and its contents enforced and intentions realized. Management of the software will also entail recognizing the inherent weaknesses and correcting them at the same time.

A contract can be between a business and its suppliers an employer and their employees and so on. Contract Management Software presents an automated way of managing a contract.

Contract management software

Do you want to store and manage all your leases, legal and licensing agreements? Do you miss your contract deadlines? If so, then you should opt contract management software. So that you can streamline administrative tasks. Contract management software not only provides the status of the specific contract, but also facilitates compliance and reporting. Brace yourself to know all the details and insights about contract management software which is winning the heart of many business owners. First and foremost, this software which is also referred as Contract Automation Software or Contract Tracking Software helps to manage a new contract request, document authoring, negotiation and contract creation. Later on, from contract reviewing to an approval process, and documentation of execution of the contract, contract management software follow and track the contract till the end.

Features of Contract Management Software

In most cases, contract management software will entail a well- structured procedure that will be used to create and execute the contract. It may also come with computerized alerts to manage the contracts; performance indicators, contract authorizations and appraisals. There is also the advanced management of workflow and other monitoring and financial applications. Some applications will generate the contract for you and get images of signed contracts. Among the features of the software is also the ability to create certified and professional contracts that meet legal directives and supply categorization as well as systematization in contracts. 

The software should also have storage features for the contracts. With such software, you should be able to gather and store each one of your contracts in a single system. This will help in proper record keeping for the company as well. When you have an electronic storage of your contracts, you can make its copies as well as well as modifications and amendments. Contract Management and automation software should also have payment services that will include negotiation of the payment terms, compensation methods and a way of tracking payment. These should run from the initiation to the conclusion of the contracts. 

It should also support the implementation of the expenditures that is owed to partners as long as the contract is in use. It is often helpful to have a single place where you can discuss and document your payment negotiations as well. During negotiations, the contract management and automation software will let you authenticate and authorize chargeback claims for all the contract partners. When it comes to contract endorsement, the software will let all parties deny or approve any part of the contract goals of their partner. This is always important because the contract cannot be finalized unless there is approval from the people involved. It is always helpful when there is an investigation and analysis of the different contract-based relationships as long as the contract is in use. Contract management software will intently scrutinize all the agreements, quality of the implementation strategies for all customers and their financial analysis. This is done according to the demographics of the individual parties to the contract. It is also good to know the efficient and non-effective strategies so as to optimize future strategies.

Contract Management Repository or Databases

Contract management and automation software need a database which acts as the heart of their operations. The database can monitor a large quantity of data simultaneously while tracking and collecting meta –data at the same time. It then disperses the information to users in a searchable and open format. With the databases, the software can monitor all the contract deliverables. You will find contractual obligations and critical data in the databases of the software. The contractual database may be a simple list, or it could be complicated with the ability to track all types of information in the contract. Databases also help users and vendors to get contract and vendor information. It also helps employees to plan their work in a proper way. They provide instant and accurate information, and the best thing is that most of the software have different ways of accessing the information.

Important Stages in a contract Cycle that may need a Contract Management Software

Among the common phases of a contract cycle is the negotiation stage where both parties negotiate until they reach a consensus that will make everyone happy. The amendments stage entails the various changes that are made to the contract. You can only make changes if both parties are aware and agree to the changes. Once everything is in place, you can proceed to the other stages of audit and approval. Renewal of the contract will come when the current contract expires, and the company still wants to work with the other party. If you have good software, it will notify other suppliers in the market, and you get a better deal as compared to the one you have at the moment. The other stages are request and execution. Some of the stages come at different times while others come at the same time. Regardless of the timing, the contract has to go through the full cycle so that it can mature.

Benefits of Using Contract Management Software

Contract management software is important as they can bring a number of benefits and advantages to the organization. Firstly, it assists to decrease maverick buying and supply risk due to standardized procedures. Because buyers without much hassle can get all the information, whether the contract exist or not and information about the suppliers, etc. As a result, there is an increase in negotiating saving when bought as a whole making it cost effective and valuable. 

One of the best benefits of contract management software is the spend visibility. In risky areas that are prone to disaster or economic uncertainty, this software allows easy identifications of contracts. Also in a study it has been found out that compliance management is improved by 55% when using contrast management software. 

Furthermore, this software provides an analysis of performance. In this way any regulation violation is dealt immediately. As it makes easier to compare actual purchases against contracted buys. Likewise, it makes it easy rebate management. Moreover, it eliminates the chances of renewing contracts going unnoticed. The system alerts you beforehand when you might be engrossed in some other business cycle by putting you on track of things happening around. Companies that use contract management and automation software are assured of effective management if contracts and this usually translates into more profits for them. Your business will also become more visible whenever suppliers are offering good deals. With the management software, there is a guarantee that both parties will comply with the set conditions and all the terms of the contract, and this helps to improve productivity. If you regularly deal with hundred of businesses contracts, then you are better off using contract management software. The latter will not only handle every contract properly, but it will also ensure that everything is set within the set time limits. 

The fact that contract management software is automated means that there is no chance that the contract will get misplaced in any of the stages before and after maturity. It will be hard for it to get into the wrong hands as well because you can save them on one computer or online cloud servers. Sometimes it can be difficult for a company to know which if its contracts is finished and which ones are still pending. It makes it possible to alert the people who are involved in the contracts, and once they are finished, you can simply archive them after marking them as complete. 

For most people, it is never easy to track changes in agreements as they find it both time -consuming and tedious. This is especially if there is a stack of them. With automated contract management it is certainly easier to find the changes as well as the exact time and date they were made and who was responsible for making them. Negotiations between parties can be smooth or may not be as smooth. Using contract management software, it is possible to collect and summarize critical information from various contracts and other legal documents. Whenever people instantly pull out relevant information during negotiations, things can go smoother and faster. 

There is also risk aversion which means that given the compliance management, that is based on approval workflows and businesses rules among other criteria for performance, it means that nothing will go wrong, and you can extract data or get it for more analysis and reporting. In case there is a barcode; you can easily authenticate a document. Meaning you will not have to worry about its security and integrity. You can tell if there has been any tampering of the document if it does not pass the bar code test. If that happens, you can easily trace the original document and regenerate it instantly. This will help in eliminating any repudiation. When the system is automated, and the processes are easier, it helps to save on costs because there is efficiency. People go into businesses to make money, and when contract performance of customer management, supplier/sourcing, and vendor management are optimized, and there are reduced costs. You are, therefore, assured of return on investment which every businesses person wants for their businesses. 

Financial reconciliation is also made easier with contract management and automation software. You can easily configure calculations of royalty payments, tiered pricing as well as several other calculation-based processes that are needed to reconcile financial statements. One of the best attributes of the contract management software is that contract managers and administrators can access them wherever they are while using a device of their choice. The user-friendly interfaces make it easier for people to learn the software thereby reducing training costs and the time used for user uptake. The delivery options are flexible as well, and they range from hosted, fully managed software to the turnkey customer premise solutions. These work for people with contracting requirements within the enterprise environment. Since organizations have different needs, you may get contract management and automation software that is tailored to suit your needs. Some companies will customize the software for you. If you are using a good company, then you are assured of good turnaround time for the application and friendly costs.

How to Choose Contract Management Software

Many companies offer software for managing contracts in organizations. You can easily get lost in all the noise and end up with software that neither meets your needs nor makes things easier for you. To get the ideal software, you should look for one with the needs of the organization in mind. Some organizations are large while others are small. These companies do not have the same kinds of needs as far as software is concerned. Some businesses may just need an application that will send alerts when some milestones are hit. On the other hand, some software is a part of the business strategy of the company, and here you may want to consider the long –term and short-term goals of your business before making a choice. 

You should ways go for interactive and sophisticated software that provide the best negotiations between the contracting parties that include audit trails, electronic signatures, collaboration and online redlining. When contract negotiations are done online, it helps to minimize exposure and contract risks thereby making them more accurate. You should ensure that the system you are using will take the process from the initial stages of contract generation to the signed contract image. You should also be able to use the program for searching the contracts management and automation software workflow and database among other procedures of the contract management life-cycle. 

To get useful management software for contracts, you should also have in mind qualities such as their ability to bring in profits and avoid risks while at the same time being compliant. When looking for suitable software you should also ensure that it can evaluate contracts and projects quickly. It should also have exceptional contract outcomes. The software should also remind both parties of deadlines and commitments. Another consideration is its ability to ensure that you have kept you are spending money within the budget. The user should also be able to get an overview of the current happenings as well as what is coming.

Tips when choosing a contract management software

Are you still confused that contract management software is productive, but time consuming? Keep this in mind, that most users are non-technical people and a good software is not only easy to use, but also easy to train so that the rest of the company can adapt quickly to streamlined contracting process. This marks the importance of what points should be considered while purchasing it? 

Make sure your contract software is capable enough to manage the relationship between different contracting parties and entities. Also, it should be flexible to meet growing demands of a company. Elaborating it, it should be designed to facilitate business users so that they can manage contract performance seamlessly. Likewise, the software should be capable enough to add custom fields because managers cannot go behind The IT people make changes to it. 

Are you looking forward to put aside all your worries and focus on your core business? You need a contract management software that grows exponentially over the years. In this way the software automatically grows with your business by letting you focus on other issues too. This is a very important quality of contract software’s. Moving further, a good contract management prioritizes the data security by implementing a protection mechanism at various levels. This is a critical aspect if your software is online. 

Make sure that your software main target is on interoperability with whom the company has a business relationship. Likewise a good software has performance metric which is beneficial for executives and manager. It gives an insight about the relationship with different parties. This gives a chance to higher authority to make witty choices based on facts rather than assumptions. Above all, always pick that contract management software which will make your contracting process more effective and fail proof, so that it can team up with the company who have strong values in this field. This aspect should be ensured as these software’s can be expensive in the long term. 

Traditionally, companies manage contracts manually through file cabinet storage and folder. This practice reduces the overall efficiency of an organization. Using a contract management software helps to save countless hours when managing a contract. The time saved can be utilized in other aspects which can add increase the worth of the company in other ways. 

Stages of contract management software system

Contract management software is categorized in different stages so that typical contract processes are being structured and organized. The process includes the following steps: 

1. Initial requests.

The contract management begins with relevant documents and identifying contracts to support the basic contract’s purpose. 

2. Authoring contracts.

By using automated contract software the process become more efficient and streamlined as compared to writing a contract by hand which is extremely time consuming. 

3. Negotiating the contract.

The software allows the users to compare the version in order to avoid any conflict and disaccord which will reduce the negotiating time with the contractor. 

4. Approving the contract.

Contract management software keeps the work pace fast by means of tailored approval workflow so that time is not wasted in getting management approval. 

5. Execution of the contract.

Contract management software implies the usage of e-signature and fax support allowing users to eliminate the signature process. 

6. Obligation management.

This stage make ensure that the project is managed well by stake holders and its real value is not being destroyed in the early phases of growth. 

7. Amendments and revisions.

This system itself overlooks items such as initial drafting to amend the original contract. 

8. Reporting and auditing.

The software ensures contract audits. This is done so that both companies have complied with the terms of the agreement. 

9. Renewal.

The software itself create new contracts by allowing the organization about renewal opportunities. On the other hand, doing contract management manually can result in loss of revenue for a company. 

Enterprise contract lifecycle management (CLM) software streamlines every process to reduce the financial loss of an organization by minimizing risk. From providing tools to automating predictable steps and managing the contract lifecycle, these software contributions to the company can elevate the total worth of an organization in a market. All in all, contract management provides solution for your contract management rather than adding more trouble.

Contract Management Vendors or Distributors

One way of getting contract management and automation software is by buying them from vendors or dealers. When looking for the for a good one, you should find one that can offer you first level of support for the software packages. They should also provide technical support to you as well. There are different contract management software for various industries, and these include law firms, governments, health care and business. You should get a distributor that will give you the one that you need for your industry. When choosing a company to work with you should also consider their customer service as this will determine your future relationship. There are some who also go the extra mile and help in installing the software packages for their clients. Some also offer a tool that can allow end users to install, decompress and copy files. The contract management software distributors are often the ones to choose the suitable software for your company. You should, therefore, consider issues such as the size of the company and the length of time it has been in operations.

Conclusion

It is a fact that choosing the best and right contract management and automation software is very important for new generation businesses. Choosing the right contract software has it's perks for many years to come, try our no obligation free trial of CMx Software by clicking here and see how we are different from the noise in the Contract Management Software market.