Contracts are an essential part of every business transaction. They establish the terms and conditions between the parties involved. However, managing contracts can be a complex and time-consuming process. At scale, manual contract management using spreadsheets and shared drives adds unnecessary friction to the contracting process. How do you know once you have reached this stage? In this article, we will explore some of the most common signs that indicate you may have outgrown a manual contracting process.
1. Missed Deadlines and Renewals
One of the most common contract problems is missed deadlines and renewals. This can lead to penalties, loss of revenue, and reputational damage. A contract management system can help by sending automated reminders about upcoming deadlines and renewal dates, ensuring that you never miss a critical date again.
2. Difficulty Locating Contracts
If you're spending valuable time searching for contracts or can't find the most current version, it's a sign that you have a contract problem. Contract management systems centralise your contracts in a single, searchable repository, making it easy to find and access the information you need. They can also help automatically rename contracts in a manner that is consistent with your internal naming convention.
3. Inconsistent Contract Terms
Inconsistencies in contract terms and conditions can create confusion and potential legal disputes. A contract management system can help ensure that different teams draft and negotiate contracts in a consistent manner by providing standardised templates and clauses.
4. Inefficient Approval Processes
If your contract approval process is slow, manual, and error-prone, it's another sign that you have a contract problem. Contract management systems automate the approval process by routing contracts to the appropriate parties for review and signature, reducing the time it takes to finalise contracts and minimising the risk of human error.
5: Lack of Visibility into Contract Performance
If you're not able to track and analyse the performance of your contracts, you're missing out on valuable insights that could help you make better business decisions. A contract management system can provide you with real-time data and analytics on contract performance, such as compliance, spend, and risk, enabling you to optimise your contract portfolio and drive better results.
6: Non-Compliance and Legal Risks
Failure to comply with contractual obligations and regulatory requirements can lead to financial and legal consequences. Contract management systems can help you reduce these risks by providing automated compliance tracking and reporting, ensuring that you stay in line with your contractual obligations and regulatory requirements.
7: Inadequate Security and Access Controls
Sensitive contract information should be protected from unauthorised access and potential data breaches. If your current contract management process lacks robust security and access controls, this may lead to a security issue. Contract management systems offer advanced security features, such as encryption, user authentication, and role-based access controls, to ensure that your sensitive contract data remains secure. This is not possible to achieve when managing contracts using a spreadsheet.
If any of the above signs seems to align with your current contract management process, it's time to consider implementing a contract management system. These systems can help you streamline your contract management process, reduce risks, and improve overall contract performance. By investing in a contract management system, you can ensure that your organisation is better equipped to manage its contracts effectively and efficiently, ultimately leading to better business outcomes.