What is Contract Management software?
Contract management software allows companies to create, negotiate, sign, renew and gather actionable data on business contracts. The contract management process streamlines and digitizes the way agreements are managed to make the process more efficient, compliant and easily accessible.
Contract management software increases visibility into businesses’ contractual obligations and aids better collaboration with customers and suppliers which naturally results in faster turnaround times for creating and signing agreements, upgrading workflows and significant cost savings.
Why are contracts important?
Contracts are the glue that holds organisations together. They’re agreements – whether written or oral – between two parties, assigning rights and obligations to each. They can be as simple as a verbal agreement to buy a coffee from a barista, or as complex as an international business deal. Contracts are important because they enforce the rights and obligations of each party in the agreement. They protect both sides, keeping the deal fair and educating everyone on their individual responsibilities.
The Benefits of Contract Management Software
A contract management system is faster.
With an automated workflow system, you can create custom processes for reviewing and approving contracts. This streamlines the process and significantly cuts down contract approval times. With automated notifications, you can ensure that review or approval tasks don’t fall through the cracks, so your entire system runs more efficiently.
Automated workflows also improve contract collaboration by allowing multiple people to be involved in a process and by identifying every user that’s engaged with a document.
Good contract management will boost efficiency, help avoid missing milestones, minimise time spent on routine administration tasks and focus on high-value work and strategies.
A contract management system saves money.
A recent survey of 161 listed businesses over six countries found that more than 50% of the businesses surveyed still use an old paper and spreadsheet method to manage the supply chain; a huge risk considering World Commerce and Contracting has calculated the cost of poor contract management on average at 9% of company revenues every year. Factor in this KMPG survey that found businesses stand to lose up to 40% of a contract’s value if close governance of the contract isn’t followed and the case for a system to manage your contracts isn’t a hard one to make.
Your documents are finally visible.
A centralised online repository makes it easy to search, order and organise all of your contracts organisation-wide. Reports can be accessed from anywhere, anytime. Create hierarchies, delegations and groups, allowing users (sales managers, procurement teams, legal governance etc) to have wider views of the organisations’ contracts at a glance. You have complete control over who has access to what on a granular level.
Organisations are increasingly being required by external authorities to evidence their compliance with various laws, regulations and policies. This could be as simple as police checks, certification of equipment and maintaining training hours. It can also be as complex as audits, penetration testing of ICT systems and recording work health and safety failures.
Good contract management software can separately manage compliance requirements to industry regulators, change in laws and organization policies. This includes allocating specific compliance actions to contracts for the supplier to complete whilst maintaining a single view of progress across the organisation.
Having a system to keep all of this information related to a specific contract saves time and significantly reduces risk.
Who Uses Contract Management Software?
Contracts are an integral part of the business world, so, unsurprisingly, a variety of teams and departments can benefit from contract management software:
Legal teams use contract management software to manage templates, generate documents and check on compliance issues. The system allows them to track expiry dates, manage renewals, attach compliance documents and more.
Procurement teams are formed by large organisations to manage the procuring of goods and services from vendors. A contract management system helps by invoicing processing supplier terms, keeping track of renewal dates and making sure the team have approval from stakeholders across the process.
Sales Teams take advantage of the speed at which a contract can be signed with a digital system, getting that sale over the line as quickly as possible. Sales teams can collaborate with legal teams if there are any questions about the contract or specific clauses that need to be discussed before signing, however, templates pre-approved by legal allow a streamlined and super-fast process.
Finance Teams use contract management software to reconcile contracts and billing. Having visibility and control over the lifecycle of a contract helps increase profitability by identifying cost-saving opportunities, identifying missing revenue and enforcing agreements and obligations.
Small to medium businesses use contract management systems to meticulously organise their contracts and promote collaboration with their teams and suppliers. A centralised online contract management system removes the need for storage and office space, whilst also keeping records safe.
WebCM’s contract management software is used by the Royal Flying Doctor Service, Bendigo Bank, Opal Specialist Aged Care and many other organisations to keep ahead of contracts, make informed business decisions and stay on top of compliance.
What features does a robust contract management system have?
All good contract management systems will offer a centralised repository as a standard feature. This allows for ease of filtering and searching and provides access to users or groups of an organisation’s contracts.
However, Contract Management Systems will also differ in the features they offer. For example, a contract management module in a CRM may offer basic features, whilst a system solely dedicated to contracts will cover more specific and nuanced needs.
While there are many features available for contract needs, as a rule, it can help to focus on some essential features that will further improve the efficiency of your contractual process. Pay attention to systems that:
Handle all types of contracts/agreement:
A robust system will handle all contract types. The system developed by WebCM accounts for contracts associated with services, engineered products, technology hardware software development, qualified contractors, leases, grants and more. It also doesn’t get confused handling both the sales contracts and the supply contracts for the same client.
Adapt to any contractual situation:
Not all contracts are the same; some contracts such as software development require high touch management to ensure the outcome is on budget and on time. Others such as leases may require only annual reviews. WebCM is flexible enough to maintain the level of governance appropriate to the individual contract while providing an overall systemic solution.
Manages complex compliance:
Organisations are frequently required to evidence the compliance of their sites, systems and contractors to various laws, regulations and policies. Failing to provide such required evidence due to a system error, can result in costly penalties or onsite accidents.
WebCM’s dedicated compliance module solves organisation-wide compliance issues both internally and with external contractual relationships. It provides full reporting of progress and any outstanding tasks. The module allocates compliance actions to specific contracts with specific tasks by a due date.
Sends notifications, creates events or updates contracts automatically:
Workflow is a critical component of any contract management system. A good system will reach further by allowing a contract to be updated with new information once certain actions have closed. For example, if a change of field is required, or the contract is passing a specific date or requires a compliance evidence document to be attached).
WebCM has developed a powerful Workflow engine, a module that works alongside the contract records and event templates to react to changes within the system (e.g. changes in fields, or specific dates) and take defined actions. Actions may include sending notifications to user email accounts, creating events, or updating existing contracts. Your workflow is infinitely configurable and has no limits on the number of steps or parties/Users.
Easy to use:
With WebCM managing contracts is easy. Add new contracts to the system or edit existing contracts with a click of a button. The at-a-glance reporting feature with traffic light status updates will automatically signify the status of contract actions, diminishing the danger of missing crucial stages in a contract’s lifecycle The simple, clean design of the interface, with consistency across functions means that users can quickly get to what they need.
Why not book a demo and experience our SaaS solution to Contract Management! Our bespoke WebCM service ensures your system is tailored to the unique requirements of your business. We’re also a pretty friendly bunch; get in touch with us here.