May 30, 2022
Contract Workflows and Efficiency in 2023
Becoming more successful is not easy, but it can be simple. One of the more straightforward ways to boost your overall performance is to optimize the way you handle your contracts. But where do you start? Once again, it’s simple. Learn how to streamline your contract workflow efficiently, in this guide.
Table of Content
- What is a contract workflow?
- What is contract management workflow?
- Why is it important for contract workflows to be efficient?
- How to achieve successful contract management workflow?
What is a contract workflow?
- Request a contract
- Create a draft
- Have the contract reviewed
- Negotiate the terms
- Have the contract signed
- Store the contract
- Renew the contract
What is contract management workflow?
Contract management workflow refers to the process of managing contracts from creation to execution and renewal. It involves various steps, such as drafting and negotiating contract terms, obtaining approvals, tracking obligations and deadlines, managing changes and disputes, and analyzing contract performance. A well-defined contract management workflow can streamline the process, reduce risks, improve compliance, and optimize the value of contracts.
Why is it important for contract workflows to be efficient?
IACCM says the average cost of managing a primary contract is now $6900. That’s more than enough to affect any company’s bottom line. Luckily, the type of contract workflow you implement in your business can significantly reduce these costs and add an arsenal of benefits to the mix.
- Time and Resource Optimization: An efficient contract workflow eliminates unnecessary delays, reduces manual tasks, and streamlines processes. Businesses can save valuable time and allocate resources effectively by optimizing the workflow. This enables employees to focus on higher-value activities, such as strategic planning, innovation, and nurturing client relationships.
- Cost Reduction: Cost reduction is crucial for enhancing profitability and maintaining a competitive edge in the market. Manual workflows can increase administrative costs, errors, and rework. By establishing streamlined automated processes, businesses can minimize administrative overheads, mitigate the risk of costly mistakes, and optimize resource allocation.
- Compliance and Risk Management: Workflows that are made for efficiency ensure regulatory requirements and internal policies that manage contracts. By establishing transparent approval processes, maintaining accurate documentation, and adhering to legal obligations, businesses can mitigate risks associated with non-compliance, contract disputes, and financial penalties.
- Timely Contract Execution: An effective contract workflow enables organizations to meet critical deadlines and avoid unnecessary delays. Businesses can ensure that contracts are executed, renewed, or terminated promptly by automating tasks, setting up reminders, and facilitating collaboration among stakeholders. Timely contract management strengthens relationships with vendors, customers, or partners and minimizes the risk of missed opportunities or disputes.
- Improved Collaboration and Communication: Automated workflows facilitate seamless collaboration among internal teams and external stakeholders in the contract lifecycle. Businesses can enhance transparency, alignment, and coordination by centralizing contract-related information, providing real-time updates, and enabling effective communication channels. This fosters better teamwork and enables smooth information exchange, reducing errors and misunderstandings.
How to achieve successful contract workflow implementation
Would you like to increase your efficiency, reduce your costs, and improve your bottom line? Then learn how to achieve a successful contract workflow implementation in nine simple steps.
1. Review your existing process
Chances are you already have processes in place for contract workflow management. So why start from scratch?
Your existing processes should help you with at least one thing. It’s making a list of all the stages and responsibilities you need to keep in mind.
They should also make it easier for you to spot inefficiencies in the way you handle your contracts.
So start by mapping out your existing processes. Then use that to make a list of stages and responsibilities your new contract workflow needs to account for.
2. Create a centralized contract repository
You’ll have a hard time being efficient if you don’t have visibility over your contracts and their status.
This is a mistake a lot of businesses make - keeping their contracts scattered across multiple systems or locations. So why not separate yourself from the crowd? You only need to create a centralized contract repository for your business.
A centralized repository has many benefits. It doesn’t just allow for greater visibility and control. It also saves a lot of time. Once you introduce it, you’ll never spend another minute tracking down contracts or information you might need that’s in them.
3. See if you can automate contract creation
Gone are the days of using Microsoft Word to draft new contracts. And it’s not just that the process is tedious and time-consuming. It also puts you at risk of making a lot of unnecessary errors. These include duplicate content, lost documentation, and errors in the content itself.
It’s no wonder that a whopping 81 percent of businesses have plans for automating their contract workflow management.
But what can you do? You can use contract templates or software that creates contracts for you. Either way, you’ll get a much more efficient contract workflow.
4. Integrate all your systems
What do all truly efficient contract workflows have in common? They’re designed so there are no major obstacles when switching between tasks.
Picture this. You’ve just finished creating a new contract. Now you need to fill it in with client information. But to do that, you have to go into your CRM and perform multiple searches.
Once you’re done, you need to send the contract to legal for review. Of course, now you need to navigate to your email account, draft a new message, and attach the document.
Now picture this. You’ve just finished creating a new contract. Since the software you’re using is integrated with your CRM, you can automatically populate it with client information. And since it’s also integrated with your collaboration tools, you can assign tasks to colleagues without leaving the dashboard.
Doesn’t that make a world of difference?
5. Decide who needs to review the contracts and when
It doesn’t matter if it’s your sales team or your legal team that’s creating the contracts. There will be people in charge of reviewing them before they can be sent out.
If you don’t decide on the exact order for the approval stage, there are bound to be inefficiencies in the process.
What you need to do is map out a special workflow for this stage in the contract lifecycle. Of course, it would also be great if you could automate it.
6. Find the easiest method for negotiation
As you know, contract negotiations sometimes get messy. For example, there can be a lot of back and forth between the business and the client. Of course, this can put a lot of unnecessary strain on your company.
However, there are things you can do to optimize this stage as well. It’s best to use contract management software that allows you to do everything from a centralized dashboard.
Instead of exchanging endless emails, you could request changes and send them for approval without ever leaving the dashboard. Doesn’t that sound a lot easier?
7. Consider using a digital signature for approval
If you’re wondering how to achieve a successful contract workflow, you should learn about eSignatures.
The traditional way of approving contracts includes printing, signing, and scanning documents. As a result, you have a contract workflow with little visibility and lots of delays.
But when you use digital signature software, you only need to click a single button and the contract is signed. You can even set the signing order to further optimize the process.
8. See if you can automate storing and renewal
Your goal is a more efficient contract workflow. Well, the most efficient one would most certainly be the automated one.
For example, you could automate the storing process. Why leave it to your employees to remember archiving the documents properly when you could use software instead?
Also, you could automate contract renewal. This doesn’t just save time and increase efficiency. It also makes it impossible for you to lose business due to missed deadlines.
9. Don’t forget to include process analysis
Of course, the way to a truly optimized contract workflow includes reviewing your processes now and then.
Luckily, if you follow all the tips above, you’ll have a centralized repository that’s integrated with all your systems. This will make it a breeze to find and analyze all the relevant data. And that way, you can easily find ways to be even more efficient.
Getting started with Contractbook
What if you could optimize your entire contract management workflow without lifting a finger? Every single functionality we’ve talked about is included with Contractbook’s contract management software. We even take care of the integration for you. And the only thing you need to do is get in touch.
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