A Definitive Guide to Contract Approval Processes

For any serious business or organization, the contract approval process forms a crucial part of their daily dealings. And for companies that deal with a fairly large number of contracts, poor contract management can translate into disruptions. 

According to a World commerce and Contracting study, about 9% of an average company's annual revenue is lost due to poor contract lifecycle processes.

Meanwhile, with an efficient contract approval workflow, businesses do not have to worry about costly bottlenecks. From contract creation to review and execution, an updated workflow can get things going for your business.

So, what is a contract approval process, and how do you set up one that works?

In this guide, you will find out everything there is to know about its processes and workflows. 

What is the contract approval process?

The contract approval process is a part of the contract management procedure, alongside contract creation and execution. It involves the submission, review, and assessment of a contract or any of its segments. 

Each organization may define its specific approval process, and it usually includes the types of contracts and the appointed individuals. 

Contract approval workflow and automation

The processes of approving contracts involve many individuals and parts which impede the process. Hence, businesses may create a contract approval workflow. That is, automate the process for better efficiency.

A contract workflow is an automated process created with an organization’s policies to regulate the entire approval process. It ensures contracts follow a streamlined lifecycle to ensure timely contract creation, submission, review, and collaboration.

The ultimate objective of approval workflow is to eliminate confusion, time-wasting, and redundancy while promoting compliance and accountability. When all concerned parties can access a contract centrally, the approval process can be done in half the time.

Benefits of a defined contract approval workflow

There is a long list of benefits a business can get from an automated contract process. Below are some of the notable ones.

Effective contract approval

With a defined workflow for contracts, approval can be carried out faster and much better too. Since this system eliminates unnecessary impediments and repetition, mistakes that slow down tasks can be avoided. 

It also makes it possible to highlight important parts or the approval-requiring aspects. Hence, the overall process will be tidy and effective.

Transparency

An automated workflow makes it possible for everyone to assess contract paths through a central dashboard. This ensures better transparency among employees and executives and whoever is slowing down the process can get up to speed.

Better communication

Through a centrally accessible contract automation system, employees can collaborate and communicate better. Each party can receive clear instructions and prevent redundancy of tasks and processes.

Enhanced security

Automated contract workflows operate through a central database on the cloud. Not only does this eliminate messy paperwork, but it also keeps contracts safe and secure, away from unauthorized access.

Increased customer satisfaction

The approval processes can be challenging for teams and partners. However, with a workflow that speeds up the process, customers can have a more positive experience. This leaves them pleased with your services and you can expect referrals.

How to create a contract approval workflow that works

Ready to create a working approval workflow? Use these steps to prepare and set up the process.

Identify your needs

Creating an automated approval process has to address your specific needs. Else, you may end up with an ineffective workflow or one that’s irrelevant to your organization. You can achieve this through reviewing everyday tasks, organizing contracts, and understanding issues employees encounter.

Create terms and conditions

It is also essential to clarify rules for contracts and their approval. A large part of this will be handled by the workflow software. However, it still helps to create understanding among team members and ensure everyone is on the same page.

Delegate team members

An automated workflow will be ineffective without specifying each person's responsibilities. Team members should be aware of their duties and steps to get them done.

Choose software and customize the services

Certain contract workflow tools help you automate the process. Select an excellent one, like Contractbook to leverage all the amazing features that make the automation process easier. Customize the processes to tailor the solutions to your specific needs.

Getting started 

Now that you understand the importance of a contract approval process, there’s no better time to set things up. In the end, an excellent workflow will improve your organization’s productivity and general business activities.

If the process outlined above seems a bit daunting, do not worry. You can take advantage of a streamlined and dynamic contract approval platform provided by Contractbook. Simply book a meeting to say goodbye to all the contract bottlenecks.