Contract management software technology employs a step-by-step workflow that covers all the stages of a document's lifecycle. The software generally includes this workflow:
Generate → Collaborate → Negotiate → Authenticate →Track →Renew
The software automates all these stages that are typically part of most business contracts. Here is how it works:
- Creating the Contract
Drafting the contract manually requires a lot of time & effort which businesses can do away with by using efficient software that automates contract creation. By offering facilities like a document authoring wizard & templates with pre-populated fields, the contract management software makes contract generation quick & easy. Automating this stage of contracts also plays a vital role in eliminating inaccuracies, like missed details, spelling errors, etc.
- Collaborations Between Stakeholders
This stage allows multiple departments, stakeholders, & parties to outline the contract's terms & conditions. The parties & cross-functional teams involved can work on the clauses present in the contract to ensure all the required content is laid out in the document. With a CLM tool, this process becomes extremely simple as users can collaborate online & work on a single contract simultaneously.
- Discussions & Negotiations
The next stage of contract management software enables parties to negotiate the clauses set out in the contract. The software simplifies this process by allowing stakeholders to collaborate from wherever they are. Contract management software makes transactions seamless by offering an online platform for parties to negotiate & reach agreements.
- Authenticating the Contract
In this stage, the parties authenticate the contract by getting it stamped & signing it. A software-based contract management tool eases this process by offering inbuilt contract stamping & signing solutions. Post negotiation, the contract can be digitally stamped by paying stamp duty online via the platform. The parties can then proceed to electronically sign the contract to facilitate its execution.
- Contract Tracking
Tracking & evaluating a contract once it has been executed is of utmost importance for any business. The contract management software comes with a contract tracking system, which makes contracts dynamic, enabling the extraction of insights & actionable data from the way they perform. Businesses can use the data to make future decisions more smartly. In addition, tracking a contract post execution offers a huge potential for mitigating risks that may arrive.
- Contract Storage
Cloud-based contract management software makes document storage & retrieval much simpler. Businesses can store large volumes of agreements securely in a centralized contract repository made available on the contract management platform. Users can quickly look back at documents as the contract database software simplifies document recovery.
- Contract Updates & Renewal
Contracts will need to be renewed or terminated after a defined period. An automated contract management software ensures the intended recipients receive reminders & alerts whenever critical dates such as contract expiration, cancellations, etc., are approaching. This feature helps businesses stay on top of all their contracts & significantly reduces the chances of missed deadlines.
Smart Features for Modern Contract Management
Contract management softwareis built with an array of business-centric features that enable a smooth & effective way to manage company documents.
- Template & Clause Libraries:Contract software solutions offer businesses an extensive contract clause library &contract templatesoptions that play a key role in speeding up contract creation.
- Integrated eStamp & eSign:Contract management software is built to offer eStamping and electronic signature functionalities that make contract authentication effortless. These features also enable the creation of electronic evidence, which may be required later.
- Analytical Dashboard & Audits:Contract management software simplifies business decision-making by offering statistical analysis of performance metrics on an analytical dashboard. Detailed audit reports of signatures & digital stamps act as document activity evidence.
- Centralized Repository: Businesses can have a centralized digital repository of all the contracts they produce for safekeeping. Cloud storage enhances document visibility & accessibility multifold, with options for clause meta-data tagging & easy search-retrieve functionalities.
- GSTIN Verification:Integrating a GSTIN verification API into Contract Lifecycle Management software simplifies the validation process for vendor and client GSTIN numbers. With a single API call, businesses can instantly verify the accuracy of provided GSTINs, mitigating potential tax compliance risks and reducing the likelihood of fraudulent activities.
- MS Word integration:SignDesk MS word
integration enables seamless contract drafting and collaboration.
All modifications are tracked within MS Word, maintaining a clear
record of edits. Multiple stakeholders can collaborate directly,
streamlining the drafting, editing, and reviewing process for
error-free contracts and accelerated finalization.
- Form builder:SignDesk's low-code CLM Form
Builder enables users to create, customize, and manage forms
directly within the CLM platform. The form builder streamlines data
collection and allows users to draft forms online using a
user-friendly drag-and-drop interface. The platform enables users
to configure field properties and define required or optional
fields.
- Contract Redlining:Contract redlining allows users to mark changes, suggestions, and corrections directly on digital contract documents using customizable markup tools like highlighting, strikethrough, and underlining. This process enables real-time tracking of changes, collaboration with multiple stakeholders, and reduces errors, ultimately streamlining contract review and approval cycles.
Types of Contract Management Software
- Contract Drafting Softwaresimplifies and speeds up the initial contract creation step. Features like pre-built templates and clause libraries reduce errors and help businesses maintain consistency across all their contracts.
- Contract Redlining Softwarefacilitates stakeholders to collaboratively review and edit contracts online. Reviewers can add comments and suggestions directly on the contract and track changes made by the different parties.
- Contract Collaboration Softwareprovides a centralized platform for storing, sharing, and negotiating contracts. It streamlines approvals, promotes transparency in the contracting process with features like document version control.
- Contract Review Softwareoffers in-depth evaluation of contracts using AI-powered features to analyze contract language, identify potential risks, and ensure legal compliance.
- Contract Dashboard Softwareoffers a centralized view of all contract activity and performance and reports with key metrics on contract status, approvals, and deadlines. It facilitates data-driven decision-making and proactive contract management software.
Contract Reminder Softwarehelps parties keep track of important deadlines like renewals and terminations associated with contracts. It sends automated notifications for upcoming renewals to prevent missed deadlines.
There are distinct contract management software tools available for businesses to draft, collaborate, negotiate, review, and execute contracts.
Although thesecontract automationtools provide certain functionalities, handling them across several interfaces can be time-consuming and reduce productivity.
Smart Contract Management Software Automates Contracts Across Industries
Having acontract automationsolution in place can make contract management workflows streamlined & uncomplicated for businesses operating in various industries. Some of the industry sectors that can benefit from this software include:
- Financial Institutions:An inefficient way of
managing company contracts can subject businesses to major
regulatory risks. That is why it is essential for financial
institutions like banks & NBFCs to makecontract administrationa priority.
Automation can help majorly in this respect by offering finance teams improved contract trackability, simplified version control, and better document visibility, all while ensuring a high level of security. - Retail & FMCG:Retail businesses have to
compete in volatile markets with razor-thin margins. Hence,
top-notchretail contract managementis a necessity for
these firms. Retailers must have complete visibility into sales
performance as well as supply chain operations to stay ahead of
their competitors.
Utilizing the best contract management software helps retail businesses overcome these issues by offering a platform for enhanced collaboration with vendors, improved contract visibility & risk management. - Healthcare Sector:Contract management software
is essential forhealthcare industriesto set up clear
guidelines & expectations well ahead. It helps these businesses
reduce the chances of disputes down the road.
Using the software can help them maintain consistency with all their contracts, optimize their security, prevent errors & keep track of all the healthcare contracts efficiently. By extracting statistics on the contract's performance, these firms can experience ease in making decisions. - Insurance Companies:Usingautomated contract softwareallows insurance
firms to centralize contracts that span various facilities &
insurance types. An automated approach to managing the plethora of
insurance agreements, helps these firms create, execute & track
them more efficiently.
The AI-backed system of smartly managing contracts helps reduce the chances of risks for insurance firms by ensuring contract compliance. - Pharmaceutical Businesses:Pharma companies canbenefit from contract management softwareby developing policies that safeguard them from force majeure circumstances. Before releasing a new medication to the public, these companies must also complete a plethora of applications to guarantee compliance with administrative requirements. Using automated contract management tools reduces this burden for these companies.
- Manufacturing Industries:Manufacturing businesses are required to enter into numerous contracts every day which they can streamline & simplify with contract automation software.Contract manufacturing softwarealso enables smooth tracking of each contract across its lifecycle, making it a very useful tool for manufacturers.
- IT Companies:Contract management software helpsIT firmseasily create & implement error-free documents using pre-approved clauses & document templates. The technology also helps send out automated reminders whenever IT product licenses need to be renewed.
Key Verticals That Rely on CLM Platforms
Utilizing an automated contract management solution can give many business departments an upper hand with their workflow. Legal, operations, human resources & sales are some of the teams that can hugely benefit from using this software.
- Operations Teams:Companies have specialized teams built to collaborate with vendors for procuring products & services. Their typical process flow would require obtaining negotiating vendors' terms & conditions, approvals from multiple personnel & keeping track of vendor agreement renewals.
- Smart vendor contract management software can streamline all of these processes. By offering features such as remote contract stamping & signing, online negotiation support, automated reminders & contract performance tracking, the software enhances the operational efficiency of these teams.
- Legal Teams:In a business, legal teams have a high level of authority over contracts & are creating & executing multiple agreements on an everyday basis. In-house legal departments can use contract management software forcontract and agreement platformsto simplify their tasks multifold.
- Contract management software is built with contract template libraries & pre-populated contract clauses with customizable fields, enabling legal teams to draft contracts,addendums and amendmentsin a fraction of the time.
- Sales Teams:Sales representatives can benefit
from automating client contracts. It saves a lot of time &
allows them to close deals at a much faster rate. The time saved by
automating contract creation & execution procedures helps sales
reps clinch more deals in a remarkably short time span.
- Business agreement software for sales reduces the dependency on legal teams by ensuring contract compliance. The online contract repository system even helps these teams execute contracts remotely, boosting sales productivity & performance.
- HR Teams:The human resource departments in organizations are tasked with producing high volumes of employee contracts as hiring takes place almost perpetually. Contract management software simplifies this for HR associates by automating onboarding & recruitment paperwork such as employee agreements & NDAs.
- In addition, managing employee exit formalities becomes hassle-free for HR teams to deal with using contract management technology. With the tool, clearance forms, due certificates, etc., are processed automatically across the required departments saving plenty of time & effort.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
