November 14, 2022
Collaborative Contract Management Benefits: How to Finalize Your Contracts More Quickly
For many teams, the contract process is a long and drawn out one. Contracts are scattered across the business, sales reps are using the wrong templates and exposing the business to risk, and it takes forever and a day to finalize the agreement and get the other party’s signature. If this sounds familiar, you might have a contract collaboration problem.
It can be difficult to finalize contracts when your teams are working in a silo and only a select few have visibility into the contract process in general or even a specific contract. But using Contract Lifecycle Management (CLM) software, your internal and external teams can get on the same page about your contract process, collaborate more efficiently, and finalize your contracts more quickly.
What is Contract Collaboration?
Contract collaboration is the process of working with internal and external stakeholders at each stage of the contract process to ensure seamless and effective contract execution. Without a CLM, contracts can take weeks to finalize.
Without a CLM, reps at some SMB companies might use templates they found in a shared drive somewhere, add in the terms the client wants, and send it to the signer without legal or finance reviewing it.
Even at companies in higher growth stages, while their process for finalizing a contract might be a bit more sophisticated, their contract finalization process is just as tedious. For instance: when collaborating on a contract, legal creates the agreement from scratch, sends it to the other party’s legal team, and begins the long sequences of redlines in Word that are hard to track and even harder to finalize.
But using a CLM makes it easier to automate the more manual aspects of the contract lifecycle. It helps you negotiate your agreements more quickly, use templates with approved legal language, and get the contract in front of the signer with little to no delay. A CLM can be the difference between a smooth signing experience for your counterparty and a drawn out contract finalization process with questionable terms.
Benefits Using CLM as Collaborative Contract Software
Shortening the time it takes to finalize a contract can positively impact so many other business functions and outcomes. For one, it can lessen your risks and shorten your sales cycle, giving your business a competitive advantage in the market.
Here are some after benefits of good contract collaboration:
Improved Internal Alignment
Contrary to popular opinion, no single team should be responsible for the entire contract process. There are too many teams that touch a contract for any single one to have complete control and sole insight into the process. Otherwise, there will be no consistency in your internal contracts and your company’s right hand won’t know what the left hand is doing.
But using contract collaboration software like CLM, RevOps, finance, operations, and other critical business units can work together on agreements and add necessary input without drawing out the entire contract process.
Higher Average Contract Value (ACV)
Chances are, the more complex your contract is, the higher its cost. On one hand, the more expensive the deal, the more complex the contract. On the other hand, the more complex a contract is, the more it costs to review, approve, and finalize. With a poor contract collaboration process, the costs to execute the contract can skyrocket and eat into your profits.
With a CLM, your team can reduce the amount of time it takes to execute a contract by streamlining the negotiation and review processes. Being able to do more with less time helps you retain more of the average annual value of the agreement. Time is money, after all.
Time Saved in Negotiation
Contract collaboration happens not just with your internal team but also with external parties. Namely, your clients, vendors, partners, and other people with whom you have a contractual relationship. And as each business tries to secure deals in their best interest, the negotiation phase can be a fraught stage in the process.
Each party wants to ensure that the contract accurately reflects their business needs, and so they spend time redlining each clause in the Word doc. This can get out of hand quickly, with parties redlining their redlines, making it difficult to discern what changes are new or yours.
A CLM is perfect for the negotiation stage, as it tracks redlines and negotiations in one place, making it easy to make, manage, and adopt proposed changes. This way, there is more visibility into the process and everyone feels considered during negotiation, allowing the process to go more quickly and smoothly.
Better Customer Experience for the External Signer
When a contract takes too long to get over the line, the signer is more likely to drop out of the deal. Because even though it might not seem that way, contracts comprise a major part of your customer experience. So if your contract process takes too long, your customer will find another vendor who makes buying easier.
Use a CLM to make not just the signing process smoother, but everything that comes before and after it. With it, you can automate your workflows based on internal use cases and make your customer feel taken care of. Even more, you can use the CLM to gain a more holistic view of everything the customer has done and asked for up until this point. And, it’s a point for collaboration, as it gives other teammates insight into what the customer needs so they don’t have to repeat themselves.
Tips for Effective Collaborative Contract Management
A contract management software is your best bet at finalizing contracts quickly and improving collaborative contract management for both internal and external stakeholders. It makes one of the more difficult parts of the contract process—collaboration—easy.
Here are some ways to ensure that your internal and external teams are all on the same page.
The external stakeholder is an important collaborator. Getting the contract over the finish line will take more goodwill than imposing your terms on the counterparty. Instead, it’ll require working together to come to an agreement of true partnership.
As mentioned above, redlining is notoriously one of the more time consuming parts of the contract process. This is because it often takes place inside of Word using track changes.
But you and the other party can both redline contracts in the same place and be able to track who made what changes. The document will look less marked up, both parties will feel sufficiently represented, and the contract gets signed more quickly.
Use CLM to get your team on the same page and present your contracts as a united front. You can do this by:
1. Assigning tasks
Contract collaboration is a team sport. There is no single team that can make it happen alone. As a result, it’s important to be able to assign tasks and delegate responsibilities at different stages of the process to ensure that the contract is executed efficiently. With a CLM, every team member can get a clearer understanding of their specific role in the contract process and be enabled to carry it out quickly.
2. Sharing Private Comments
Negotiating a contract in Word can leave your private comments with your team exposed to your external signer. A CLM helps keep all your comments in the same place, so your internal contract collaborators can make private comments that stay private. It’s also a great alternative to sending comments in email, where they can easily get lost, making ediscovery a nightmare.
3. Automating alerts
What’s more annoying than always having to check the contract over and over to see the status or to know when your part is coming up? Needing to manually check where the contract is in its lifecycle increases the turnaround time and slows down your internal processes.
Using a CLM, you can automate alerts so that after a part of the process is completed, the party responsible for the next part can know it’s time and seamlessly jump into the tool. For example, Contractbook CLM integrates with email apps like Gmail and Outlook, CRMs like Salesforce, HubSpot, and Pipedrive, and communication apps like Slack to allow seamless collaboration during the contract lifecycle. So after the contract has been finalized, you can automate alerts to Slack, attach the contract to the correct record in Salesforce or HubSpot, and route it to the correct internal or external collaborator.
Contract collaboration software takes your business to the next level. It helps you to get your entire team on the same page and present a united front to external signers. From contract creation to storage, a CLM can help your company develop and stick to a contract process that works for you. Instead of letting your contracts hang out in someone’s inbox for who even knows how long, finalize your contracts faster with contract collaboration software.
See it in action: Get a demo walk-through of Contractbook CLM.
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