Last updated on February 3rd, 2020 at 06:17 am
You know the deal isn’t done parties have signed on the dotted line. Sometimes, the time between a salesperson getting a sale and getting the signatures is too long. That’s when you risk the deal falling through or the client wanting to make changes to the terms of the contract. As you proceed through the contract management process, you can take steps to reduce this time. You can also eliminate some of the obstacles that are slowing down the contract process. Our guide offers several tips to help you minimize contract processing time from sale to signature. Each step will help ensure your deals get completed in a timely manner.
Comb Through Your Contract Management Process for Bottlenecks and Delays
Legal contract management software has many features to help streamline your contract management system. But before you delve into reducing contract processing time, you need to know exactly what’s slowing down the contract process. When you analyze the workflow of your contract management system, you will likely find a few places where the flow has been backed up, or completely stopped, on a regular basis.
For example, you might find that a contract regularly gets held up in a particular department, by a particular person, or in a particular contract management phase. Some of the biggest delays slowing down contract signature are manual data entry and communication delays across departments. After you identify any problem areas, you can better focus your attention to reduce active contract work time.
The whole contract management process extends far past getting the final signatures. It also includes fulfilling the services, getting paid according to the terms of the deal, and maintaining compliance. But many frustrating delays can happen during the first five stages of the contract management process before the contract even goes into effect. Below, we go through the first five phases of the contract management process — from sale to signature — to help you learn how you can reduce contract processing time in each of them.
1. Request Information from the Client at the Start
This initial phase of the contract management process allows you to get the information you need to prepare a draft. It’s unlikely you have large delays in the request phase, but when you streamline the request phase, you can save time.
Keep in mind that saving a day or two here or there all adds up to reduced contract processing time. Take the time to specify information for your request — a thorough request means you won’t likely have to ask for additional information. Cloud-based contract management software allows you to assign required data elements for a request before you or your salespeople send it out. You can also upload any supporting documents and track the status of the request, so you can take action immediately when your client or customer finishes the task.
Like every other phase of the contract management process, you don’t have to reinvent the wheel each time you have a new customer or client. Instead, you can create workflow templates for your contract requests so the information you receive is consistent each time. This can help you hand over the tasks to your sales and renewals teams, too
2. Draft the Contract
One of the most effective ways to drastically reduce contract processing time is by reducing manual entry. This means having contract templates available with standard terms, which can eliminate hours or even days when drafting a contract. Using contract management software will not only allow you to create standard forms, but you can also save completed contracts. This gives you the ability to search your contract repository for the exact document you need.
If you are drafting a contract and you recall a previous client or customer with the same or similar contract, you can easily access the document and use it to draft a new contract. When you have complete access to all your company’s previous contracts without having to sort through file cabinets, boxes, or unorganized files on a computer, you can save hours.
In many cases, using a standard sales contract template and MSA template, combined with your contract repository, will allow a user to draft a contract in minutes. This is much more efficient than spending hours combing through file cabinets and flipping through pages to find a particular clause or snippet. Using contract templates can also indirectly save you time through language. Once a draft contract is sent out in-house or to the client, ample time can be spent on analyzing each clause and sometimes exact wording until everyone is happy. This can waste countless hours.
The use of workflow contract templates can eliminate most of this back-and-forth. This is especially advantageous when your business requires your legal department to put together contracts. Your standard contract template will already include decisive language which has been vetted by all the necessary people in your organization. Instead of bickering over clauses and words, the focus can remain on negotiating terms and closing the sale.
3. Standardize How Your Team Negotiates the Terms of the Contract
Negotiating the terms of the contract is a time-consuming aspect of starting a new sales contract. With some clients, it might even be downright frustrating. Consistency is key, but that can be difficult without legal contract management software in place. For successful contract negotiations, fall back on the age-old sales advice: KISS, otherwise known as Keep It Simple Stupid. If you simplify your contracts so your client easily understands them, you can save large chunks of time. When the terms are clear and easily understood, your client will have fewer questions. Even better, your sales teams and contract negotiators can handle questions without having to turn to your corporate attorney.
It’s not enough to ensure your clients understand your contract. Your salespeople must also have clear direction on things that are negotiable and things that are written in stone. You can also save time if your sales team and/or contract negotiators know what concessions you might offer to close the deal. Using an enterprise contract management system, you can provide detailed guidance and attach it to a draft contract for all relevant parties to see. Saving this document on the cloud also means you can make updates without old policies muddying the waters. It’s likely you don’t want the client to see potential concessions, so you can choose which documents are available to which parties as you head towards final signatures.
4. Streamline the Sales Approval Process
Companies who want to drastically reduce the time between sales and signature can skip the entire sales approval process when they use contact management software.
When you create pre-approved contract templates, your sales team can quickly close deals without having to jump through hoops for approval or wait for responses when they are rushed to close a deal. This allows them to rapidly move onto the next sale, instead of wasting valuable time.
In some situations and for some companies, skipping the sales approval process might not be the most prudent business decision. However, this does not mean you cannot shave some time from this stage to reduce your total contract processing time. Streamlining the sales approval process can still include:
- Using pre-drafted sales contracts, which serve as a starting off point
- Workflow templates for other documents
- Offering salespeople mobile access to quickly view crucial documents and take action when necessary from all types of devices
You can also reduce contract processing time during the sales approval stage by setting due dates and sending alerts reminders to salespeople, supervisors, and other users who need to perform critical tasks before executing the contract. This isn’t just useful for your contracts team. Sales managers can set their own goals and deadlines. They can keep their teams on track with the right sales contract tracking tools. With contract authoring features and in-built metadata records, sales managers can even monitor their team’s activity.
5. Execute the Sales Contract and the MSA with the Push of a Button
After approving the contract, the next step is execution.
This requires at least one or two signatures, but sometimes more. Without contact management software, contracts can find themselves a the bottom of a pile of papers. Even worse, there’s no way to track their progress.
When the signature process isn’t automated, it’s easy for team members to let signatures fall off their to-do list. When you automate the signature process and keep track of the entire signature workflow from who signed it to when they signed it, you can stay on top of it.
Additionally, sending alerts or reminders to those who need to sign will reduce sales contracts’ negotiating and processing time. Automated reminders remove the headache of wondering if you’re being pushy, and they get the job done.
Smart contact management software has electronic signature features or integrations with DocuSign so you can avoid printing, faxing, or mailing documents for signatures. E-signatures are a legal and secure form of contract execution. In fact, relevant parties can sign from any device when e-signature features are integrated within your enterprise contract management system.
Overall Contract Management Workflow Tips To Reduce Contract Processing Time
Now that you have a handle on some specific actions you can take to reduce contract processing time during stages of the contract management process, we want to provide you with some useful overall tips. By carefully managing the workflow from sale to signature, you will be able to save even more time.
Create best practices or standards.
When each member of your sales team or your legal department does things the same way for each sale, it helps eliminate confusion and questions that can lead to big delays. One way to implement standardization is by creating one or more documents outlining standard processes. These documents can be part of the initial contract draft, so all involved on your side of the contract can reference them. This standardization keeps everyone on the same page so you can identify aberrations and failures in the process.
Train your team, and train them again.
Offer training on these best practices, followed by periodic refreshers. Developing a continuous-learning culture in your company will ensure your team follows the necessary steps to quickly move from sale to signature and close the deal. Sometimes your company might be on the receiving end of a contract request. So you also need to train your team to handle other company’s contracts. When employees don’t receive adequate training, their mistakes, missteps, and lack of experience can lead to long contract processing times.
Monitor the workflow with automatic updates.
When you automate as much of you can of the contract management process, you can more easily monitor workflow. Even better, you don’t have to spend time monitoring it. You can see the progress of each contract in your system at a glance as it moves through the process. When rejections occur, or something is running late, you automatically get notices. This allows you to take necessary action to get things moving again.
Use automated alerts and reminders.
Remember, one of the major ways to reduce contract delays is to eliminate manual steps. If you need a signature or a response, you can use contract tracking software to set automatic reminders and alerts. Instead of manually sending an email to the person you are waiting on yourself, your management system will send the notice for you. Additionally, using action-item reminders will allow you to eliminate or reduce the length and number of contract-related meetings you need to have.
Create a self-service environment.
Streamlining your contract management processes will reduce your contract processing time. But don’t let turn your contract management team into a help desk for other departments. Make sure all employees have access to the contracts they need. Salespeople, in particular, need access so they don’t have to go through your team for each sale. Also, keep all of your process documents in the cloud and archive the outdated documents. When everyone knows where to find the answers they need, your team can spend more time doing their own work.
Assign permission-based workflow roles.
Some employees and team members do not need to see sensitive documents. In fact, if everything is open to everyone, it can create confusion. When you assign workflows, make sure to grant access only to those employees who need access to complete their tasks. You can also limit access based on specific job functions. In both cases, you reduce your contract processing time by sending workflow tasks only to those who need them.
Avoid complicated software.
If you aren’t using contract management software, it’s likely you are depending on spreadsheets or database programs to store and organize contracts and related data. Not only can these programs be complicated, but they require you to manually enter all your information. When you choose user-friendly and cloud-based contract management software, you can work smarter. You will find that, once you customize the program to your organizational needs, much of your data will auto-populate. This can save all users time. It also allows contract management teams to create reports for monitoring workflow.
Optimizing the contract management process to reduce contract processing time between sale and signature requires continuous attention. But it pays off and helps you create a more efficient contract workflow. Manually tending to contracts is a painstaking task. Also, it doesn’t leave you any closer to reducing contract delays than you were yesterday. When you automate your entire contract management process with the right software, you can reduce your contract processing time by hours or even weeks. Contact us today to learn how ContaxAware’s contract management solution can help, or sign up for a free trial.