7 benefits of contract management

There are many benefits of contract management. One being that it helps to increase customer loyalty. It’s little wonder that some businesses are steering their relationships into long-term value through this process. 

The contract management system keeps evolving. A Gartner report affirms that it has evolved from a filing system to an enterprise-level system addressing costs and the pursuit of revenue maximization. As such, contract lifecycle management (CLM) software is not a nice-to-have but a necessity in the business ecosystem.

The process of managing multiple contracts is not one of the glamorous tasks in business. But before you write it off as drudgery, learn the benefits that come from having improved control over your contracts.  
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Advantages of successful contract management

The benefits of contract management are inexhaustible. But below are the seven notable ones for you to learn why contract management is important:

1. Collaboration

Contract management platforms allow authorized users to collaborate on the same contract simultaneously. They also enable them to automate manual processes. By managing many contracts at once, your employees spend less time on administrative tasks and more time on what really matters: growing your business and increasing your bottom line.

Additionally, authorized users in your organization will be aware of the current state of each contract. And because all parties involved in the contract can access the same information, there's less chance of misunderstandings about agreed-upon terms.

2. Time-saving

Managing contracts manually is a labor-intensive and time-consuming process. It involves mailing back and forth, printing, signing paper copies, scanning and uploading them to share. It doesn't end here. You have to track expiration dates and all the involved parties and what they have agreed to. Anytime you modify a contract, you'll have to repeat the entire process.

With CLM software, you don't have to deal with repetitive tasks. This software does not replace you or your staff; it only assists in everyday tasks. 

It stores all versions of a contract in one place and is organized in an easy-to-find format, so users can quickly retrieve the most current version. 

Plus, our growing library of free contract templates cuts contract creation down to minutes.

3. Increases contract visibility

Storing all files in a centralized, virtual repository enhances visibility into contracts. For example, a single contract may go through many revisions over its lifetime, each involving your legal team and other departments within your organization. A CLM system lets you track various aspects of the contract's lifecycle so that nothing slips through the cracks or gets overlooked.

More importantly, your business will be in a better position to take advantage of opportunities for growth if authorized team members have access to all of the data related to each contract under negotiation or already executed. 

4. Cuts costs  

It may seem counterintuitive that using a CLM system would save money. After all, you’re paying for something; shouldn’t that be an additional cost? In fact, the opposite is true: An effective contract management system actually reduces costs across the board. 

With review features built into CLM software, you can ensure that the required number of people check all contracts before they are sent out. That way, there are no unnecessary delays or mistakes that will cost your business money. Hence, your business can process orders faster and reduce disputes over invoices and potential penalties for noncompliance.

5. Reduces business and regulatory risks

The advantages of contract management are not limited to its cost-saving capability. It's important to note that a CLM system minimizes two types of risks. The first type is audit compliance management. 

CLM software helps to access missing contract approval messages in a business email. Once it has automated everything, there’s a remote record of each contractual activity and signature.  This way, businesses do not miss a single record of their contractual activities for reference purposes. Additionally, reminder emails can be scheduled to ensure that no important deadlines or actions are overlooked.

The system takes it to the next level by providing a standardized audit report with a few clicks. 

What’s more? The second type is contract compliance. The system runs embedded analytics on the general well-being of business relationships. These reports may comprise the supplier’s legal or regulatory compliance and the extent to which the company is adhering to the service level agreement.

6. Increases productivity 

At this point, you've probably seen how contract management can help you decrease costs. But did you know it can also help your team become more efficient?

Managing contracts is like managing any other business process: it works best when you handle it right. Consequently, streamlining the way you manage contracts can ensure that all parties involved understand the terms and conditions of each agreement, that they adhere to deadlines, and that there's less room for errors.

The right contract management tools can give everyone working on contracts greater insight into the process. Hence, they can work faster and improve their workflow efficiency.

7. Improves perception

As surprising as it may sound, successfully managing your contracts improves how your customers perceive you. Nothing frustrates clients and vendors like not finding a document they need or receiving inaccurate information because the person they spoke with couldn't access the right version of a contract. By keeping documents in one place and ensuring the right persons have access to them, you appear more responsive and professional. 

Streamlining your contract management with a dynamic tool 

When you consider the benefits of contract management, it is apparent that a CLM software is paramount to the smooth working of your business.

Don’t you just hate it when you can’t locate a file or when the files won’t open because your software doesn’t work with your client's? In many cases, your customers or partners cannot view your contract because their software does not support a particular format. 

Meanwhile, you can seamlessly manage your contract with Contractbook. We integrate with Google Drive, Slack, HubSpot, Stripe, Pipedrive, Dropbox, and so many other tools to ensure smooth automated workflows for our users. 

Contractbook is ideal for people in procurement positions who negotiate and draft contracts. It is also excellent for users looking to streamline every stage of their contract lifecycle. 

Book a demo with us, and we will help you steer through the hassles of complex contract management. 

Ready to give your team a contract boost?

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