To have a crystal understanding of a contract management system, you must first be conversant with the term ‘contract.’ A contract is nothing but an agreement between two or more parties to operate within the legal terms of their rights and obligations.
Businesses have a plethora of contracts with clients and for, efficiency and automation, they need to adopt a transformative system that offers ease of operation. Contract management systems provide relief to small businesses, incredibly reducing their exposure to legal risks.
Closing deals is the essence of a business’s existence. Small businesses thoroughly rely on contracts to achieve their bottom line. Small business contract management software helps curb the volatility of closing deals, thereby reducing time spent on contracts.
Contract Management Process
A contract goes through a series of processes before it can serve its designated purposes. Here are the processes
Creation
Creating the basic design of the terms of the contract comes into full play at the beginning of the process. The contract process might be slow and tedious because the details need to capture the full intent of the agreement.
Collaborations
Contracts need input from different stakeholders to give information and corroborate the viability of the legal terms affecting various departments.
Negotiations and Amendments
Before everyone is on board with the contract, modification of contentious issues, negotiations are critical to have a business document that meets the tastes of all its players. You need to have structures that give way to any amendments.
Signing
Once the document is agreeable, signatures come into play to show compliance. Digital platforms offer variations of placing a physical signature, either scanned or binary versions.
Auditing
Contracts need auditing to investigate how the key players are staying within the bounds of the contract. Businesses have the responsibility of making follow-ups on due process to ensure that they uphold the legal terms.
Renewal
Contracts are legal business documents and do not operate indefinitely. If not checked upon, contracts can collect digital dust if people don’t remember to track the dates. The stakeholders of the contracts can choose to either renew or terminate them all together.
Importance of a Contract Management System
When a small business has a huge volume of contracts and wants to stay in control of its contract process, an efficient system will come in handy. Systems and processes are the lifeblood of a business aiming to scale.
Here are the clever ways a small business can benefit from such a system
Saves time
As a small business, you will enjoy the benefits of making any real-time changes with your stakeholders. If there are any changes to the document, the amount of time required to correct inconsistencies, then type, send it on mail, and wait for it to arrive is incredibly reduced. With a contract management system, you can tinker the live document saving you time.
Easy to scale
If sudden your contracts increase from 50 to 300 a month as a small business, you need a system that can absorb the increase without jamming the process. A contract management system is your direct ticket for scale. The digital storage space allows you the latitude to increase without incurring extra costs on storage or headcount.
Secure
Unlike the brick and motor filing system, contract management software uses cyber security and encryptions to protect sensitive information. A filing cabinet is only as good as its locks, while software enjoys the robust protection of unique passwords. Since small businesses do not have the luxury of losing a sensitive contract, a management system provides rich security advantages.
Easy to share
Small businesses boost agility in their operations. Decisions are made faster. As a business, you want a document to be accessible to any party whenever necessary. The system makes this information shareable whether you need a client to sign or a team member to review any specification; sharing contracts becomes easy because all the stakeholders can share a link to the document for their perusal and offer feedback in due time.
Limitless storage
As a business grows, its contracts’ volume increases, and the need for storage equally grows. A contract management software is one cloud storage, allowing for more room to store more information eliminating the need for acquiring a different warehouse. Cloud storage offers the benefit of easy access to contracts instead of going through the pain of rummaging through mountains of documents to retrieve a contract.
Easy to search
Digital contracts are easy to search in seconds, saving you the time you would incur when manually searching through filing cabinets.
Summary
Contracts require painstaking effort to deal with the workflow. You can use the time spent in the process of signing contracts to deliver value to your customers.
You can implement a small business contract management system to help you and your team scale contracts.
