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Why is contract automation so important in today's corporate world?
Contract management is critical for companies because it involves monitoring contracts through a well-documented system and process that allows agreements, including their terms, transaction components, and restorations, to be monitored. The importance of contract management in any organization is to ensure that the important people in the company understand their responsibilities and promises to customers and suppliers and that they are fulfilled.
Pain points due to a lack of contract automation
You've seen the contract management process described above, and it was underlined that contract software will help you avoid bottlenecks and frictions when you're dealing with a lot of contracts. Here are some of the daily issues you'll have if you're not using or implementing contract automation:
1. Doubling the work
Creating a contract starts with a Word document, which is then presented to the other side for evaluation before being completed in further third-party programs. Imagine what it would be like to do this job on a daily basis. The following infographic shows how an inefficient Contract workflow looks like:
2. Increased time required
Your time consumption increases, especially when you search for old documents. You'll have to dig deep into the keywords to find it, either because the paper is somewhere in the office or because it's from a previous email. This is a task that you have to do multiple times and that takes a lot of time.
The time to create contracts in the sales process can be top.legal software can be significantly reduced by 50-70%.
3. Manual work
It takes a lot of time to print, scan, review, and book manual documents. That means you can't spend your time on things that help the legal department generate more revenue because they're not busy with manual work most of the time.
According to top.legal estimates, contract management software saves 85% of time spent on administrative tasks of the sales team.
4. Unsatisfactory experiences with counterparties
We already live in a technologically advanced world, but if your contract signing process is still manual and outdated, as was the case in the 1970s, you won't stand out and companies will hesitate to work with you. And most companies put the quality of these business relationships into a black and white signature process like this:
5. Version Control Chaos
Since all contract amendments are usually sent to the other party by email, you must expect unrest whenever you change the contract. To complete the final draft, you'll need to look through previous emails to see if you've missed any comments. This is a difficult and time-consuming task.
How does a typical automation process work in contract management?
According to information from Aberdeen Research It takes an average of 20-30 days for a company to draw up, negotiate and conclude a contract.
With an automated contract management solution, your organization can get the most out of the agreements you've worked so hard to achieve while reducing your risk. Contract drafting, evaluation, negotiation, execution and recording are just a few of the parts that make up the entire contract process. However, with the right approach, revolutionary contract management software, and the right tools, these activities can become the simplest component of the entire contract process.
Use automatic templates to draft contracts
Templates ensure that documents are consistent and accurate. You don't need to worry about human errors in drafting or using older versions of documents. Choosing a template that meets your needs minimizes your stress levels.
Using popular templates speeds up your transactions because you don't have to create a document from scratch or search your files for previous templates.
Use self-service contracts to your advantage
Self-service contracts allow users to create contracts without consulting the legal team. Self-service contracts significantly minimize the time required to create traditional contracts such as NDAs, as there is no need to interview the legal department every time.
With pre-approved and readily available self-service templates, every team member can be sure they're using a template with all compliant fields.
Create workflows for approval
The entire contract life cycle process is simplified and standardized through an automatic approval mechanism. This method allows the company to spend less time searching for documentation and more time doing actual work.
Processing times for applications, expense reports and approvals can be reduced from more than a week to a few hours if implemented efficiently in most companies.
Automate the signing process
Signing a contract is usually the last step in the contract management process. If you don't automate the process, collecting signatures can take weeks or months. This applies in particular to contracts that require multiple signatories. It is even scarier because it exposes contracts and sensitive information.
The process can be accelerated by using electronic signatures. Using standalone software is impractical, so investing in automated contract management with a built-in feature is a good choice. Managing directors are normally responsible for signing, but department heads may also occasionally be authorized to sign.
Use APIs to link contracts
APIs enable teams across the organization to share knowledge, take responsibility, and work autonomously. Your contract automation software is designed to be used by all of your business teams. It is therefore crucial that they are integrated with the various SaaS tools that are used in your company and can start concluding contracts from there.
Make the most of contract reporting
Companies often focus on other factors and neglect contract reporting. However, it can reveal a lot of information about any deal. A great way to achieve this is to give all employees involved a chance to speak out. The reports show how the contracts developed and how they impact the company's overall performance.
How can contracts and agreements be automated?
Legal teams can use a contract automation platform to create an automated workflow that allows business partners to write their own contracts without having to involve the legal department every time. After choosing a platform for contract automation, users would then complete the following steps.
Key features of contract automation
Powerful contract editor
A full-featured native word processor for editing and modifying legal documents online without sacrificing experience.
Contract collaboration
Allows multiple users, including counterparties, to edit a document at the same time. With an automatic save feature, all changes are saved in a single version.
audit trail
With time and date stamps, a consistent flow of all users can track all changes to the document. Contract automation software should also be able to track all third-party contract versions and revisions.
Contract databases and reminders are automated
Store all contracts in a secure and chronological order. With the help of tags and filters, contracts can be quickly sorted and retrieved. Contract automation technologies must also be able to automatically recognize contract expiration dates, send renewal notifications and reminders to appropriate teams, and prevent loss of opportunity.
Native e-signature
Enables internal actors and contract partners to sign and execute contracts faster, easier and more consistently.
Live demo of contract automation software:
Watch this smooth and interactive demo where we present our product:
https://en.top.legal/product-manage-demo
Automate contract templates with top.legal contract automation software
1. Confidentiality Agreement (NDA)
A confidentiality agreement allows parties to agree on confidential information that they want to discuss with each other but not with third parties. When it comes to sensitive or proprietary information, such as terms and conditions, product details, or trade secrets, NDAs offer confidentiality and data protection. NDAs are among the most common contracts in the business world and are used everywhere, from sales to employment to publishing.
2nd Framework Agreement for Services (MSA)
A company and its customer (s) agree on the majority of the parameters that should govern their future relationship in a Master Services Agreement (MSA). It can be an addition to an order form and refer to various DPAs, SOWs, and other three-letter acronyms, but it is the legal and commercial framework that governs the connection. This type of contract is common among fast-paced sales teams, particularly SaaS companies, such as the high-growth technology and service companies we frequently work with.
3. Employment offer letters
The cover letter is an important point of contact between the company and the applicant during the negotiation process. It is the document that makes the job offer to your best candidate, including basic information about the job, compensation dates, employment conditions, start date, and more.
