Whatever the size of your company, you have probably realized that it is becoming increasingly difficult to keep track of, and manage, all the contracts. As the business world becomes increasingly complex, so do the contracts that serve to keep things flowing. To further complicate contract management, companies are using more and more outsourcing. This increased outsourcing generates more contracts.
Wherever you are in the lifecycle of a contract, one missed date or failed contractual obligation can have catastrophic consequences. Non-compliance with the terms of a contract can lead to lost revenue, a lost customer, or even litigation. The stakes are high, and a mistake from one employee can lead to a major headache for the company. Respected contract management software that can help resolve the issue are:
So, how does contract management software make managing contracts easier? AI-driven contract management software, with the use of machine learning, can now learn to read your contracts. In understanding your contracts, the software categorizes files and tracks contracts throughout their lifecycle. Certain brands of contract management software, such as Evisort, is then capable of learning from the outcome of contracts. The software can identify weak clauses and other reasons for a failed contract.
The foundational goal of any contract management software is to ensure that everyone is on the same page regarding contractual obligations. Instead of sheets of paper, not all of which apply to every department, the entire contract is in one central location. Ideally, the contract management software will automatically send alerts for approaching dates. Fulfilling a contract on time is critical. Expiring contracts will send out an alert to make sure of on-time execution.
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Saving and making more money:
Another essential purpose of contract management software is to ensure you end up with more money from your contracts. Money is lost due to a lack of understanding regarding the terms of contracts. This issue is caused, in part, by failure to monitor the other parties’ obligations under the contract. Complex contracts make it hard to track the contractual duties of each party. Contract management software makes it easier to identify these obligations and make sure both parties comply.
Along with increasing revenue from contracts, contract management software will help reduce expenses. In quickly and efficiently being able to track your obligations and duties under a contract, your company can ensure they are delivering only what is required under the contract. You also help avoid unnecessary legal fees by tracking contract compliance.
AI-driven contract management software can also help identify inaccurate budget forecasts. The ability to learn from prior contracts helps your company avoid any under-budgeted future contracts. With complex contracts, the bottom line is often the only one looked at to determine if a contract was successful. However, there may be ways the contract could have increased your profit margin. Identifying these places in contracts where more money could be made can have a substantial impact on the bottom line.
Building better teamwork
Contract management software also streamlines workflow. Streamlined workflow avoids duplicated tasks and ensures everyone knows what they should be doing. It also helps to cut down on staff hours spent in contract management. Contract management is exceptionally labor-intensive. Contract management software cuts labor costs tremendously and allows employees to focus on more creative and money-making endeavors.
Along with a streamlined workflow, contract management software helps build better teamwork. Each part of the team can access, search, track and monitor contract compliance. This saves time in waiting for one person to disseminate information. It also keeps things moving forward if someone is away from the office or out of touch. In traditional contract management, depending on the size of the company, contractual knowledge is limited. Work often grinds to a halt waiting for instructions about the next step on a contract. With contract management software, all team members know what they should be doing, and work continues to flow.
Contract management software also helps institute a system of checks and balances. Without contract management software, too few people understand all parts of a contract. This leaves no system of checks and balances in the event of a mistake. With contract management software, the software itself acts as a check against errors. Also, it makes contracts easier to access and understand, therefore involving more people in the contract. Checks and balances help to avoid costly mistakes and overlooked deadlines.