Last updated on February 15th, 2019 at 07:08 am
Many businesses have a contract management system that is holding them back. Bottlenecks in the process make contract management inefficient. However, many in the organization may not even realize there is a problem because they are so used to dealing with the various chokepoints.
Fortunately, many of these issues can easily be solved by taking a few simple steps.
Identifying Common Bottlenecks
While there are countless factors that might negatively impact your contract management practices, the most common issues that slow down the contract process are:
- Poor storage practices
- Lack of version control
- Lack of automation
Poor Storage Practices
Poor storage and organization procedures are the number one cause for most contract management issues.
Using a paper-based system or having contracts stored in several different places is incredibly inefficient yet very common. Some companies even try to manage their contracts from a single Excel spreadsheet, or even worse with the search function of their email system.
When you need to access a contract but don’t even know where to start, you’re wasting time. For example, you might want to use an old contract as a template for a new one. If you aren’t able to find it, you would have to spend extra time drafting the new contract from scratch.
It’s difficult to stay on top of important dates in the lifecycle of the contract if you cannot easily pull up the contract.
Lack of Version Control
Another common mistake is neglecting to prioritize version control. During contract reviews, you’ll often find that a contract needs to be edited to resolve risks. This might lead to there being several iterations of the same contract.
In order to save time, it’s important that anyone who needs to access a contract to make revisionscan access the most current version easily. Without proper version control,the wrong contract might be signed. Version control is essential for risk management and for a more efficient contract management process.
Automation is a great way to increase productivity and improve workflow. Yet, many organizations neglect to implement automation for basic tasks and procedures.
It’s not uncommon for highly paid legal staff members to spend most of their workday completing tasks that could be automated. As a result, staff members are being paid to work on things that aren’t generating a lot of revenue for your organization. This can also lead to lower morale and higher turnover.
Lack of automation increases the length of the contract lifecycle and can become a competitive disadvantage.
Steps to Improve the Contract Process
Once you have identified any of these common bottlenecks, there are several steps you can take to resolve them.
Use Contract Management Software
Perhaps the easiest and most effective way to resolve most common contract management mistakes is to use a cloud-based contract management system.
Moving all of your contracts into one place makes it much easier to locate contracts when necessary. You’ll never have to waste time searching for documents again. You can simply search for contracts when needed. Additionally, a contract management system can help resolve version control issues.
Take Advantage of Automation
Most menial tasks can be automated. Not only does automation save time, but it can save significant amounts of money. Automation allows your team to quickly and effectively draft and review high-value contracts.
Your staff will also appreciate it as they can focus their efforts on more challenging and important tasks.
Automation makes it easy to stay on top of renewal dates.
Automated alerts help make sure the contract is quickly moved through the approval process. Eager salespeople don’t have to worry about a contract getting lost in a stack of papers on someone’s desk.
Drafting a contract from scratch takes longer and presents more opportunities for mistakes to be made. Standard contracts like NDAs and sales contracts are typically very similar. Creating templates will save time during both the drafting and reviewing phases.
Using templates also helps make sure language critical for the protection of the organization is consistent throughout all of the contracts.
Contract management software makes it easy to use templates and automation together to improve productivity. If your contract management system is not taking full advantage of version control, automation, and templates, you need to upgrade to more effective cloud-based contract management system.