We know — contract management is kind of like weeding your garden.
It may be tedious while you’re at it, but having a clean yard is well worth the work.
Contract lifecycle management (CLM) is a critical part of doing business.
After all, contracts are the backbone of any relationship, and improper management can lead to an unnecessary breakup.
It may be a monotonous task, but someone's gotta do it. And just because that someone is you doesn’t mean it has to be hard.
See below for the biggest challenges of contract management and learn about CLM tools that take the pain out of this critical part of your business.
TL;DR
- Contract management tools should be easy and intuitive.
- Not all contract management tools are created equal.
- Even with software, teamwork makes the dream work.
What Are Contract Management Tools?
Contract management tools simplify the contract lifecycle. Some tools can automate contract creation, approvals, execution, and tracking. Some even have AI contract management features.
By automating these processes, businesses can avoid costly mishaps and omissions.
Contract management tools take the manual labor out of the contract management process and give you everything you need all in one place.
Keep reading to learn about nine important contract management features.
1. Automated Contract Creation
You may love manual contract creation. It’s kind of like the analog vs. digital debate. Some filmmakers and musicians swear by the old way of doing things. And, you know, sometimes it does just feel better.
But in this business, you want to prioritize accuracy and integrity over everything else. Not only is manual contract creation prone to mistakes, but the process is also time-consuming.
That’s where automated contract creation comes into play.
If you create a high volume of contracts, automation takes the hard work off your plate, and, more importantly, ensures accuracy.
Not sold yet? Here are a couple more ways automated contract creation can help:
- You can create contracts from templates with built-in clauses and workflows. This not only saves time, but also helps ensure accuracy and compliance.
- Document assembly tools pull internal data from customer relationship management (CRM) and enterprise resource planning (ERP) systems. This eliminates the need for manual data entry, which can introduce errors.
Contract authoring tools help you figure out what clauses to include based on the type of contract being created. You can rest easy knowing that you’re capturing all the necessary information and that your contracts are compliant with company policies and industry regulations.
If you’re facing these challenges:
- Wasting time with manual contract creation
- Creating a high volume of contracts on a regular basis
- Not understanding what’s happening at other stages of the contract’s lifecycle
- Worrying about errors or omissions due to manual data entry
You should look for software that can:
- Store and share contracts easily
- Automatically generate agreements from templates with a few entries/clicks
- Automatically add pre-written clauses
- Integrate with your CRM
2. Approval Workflows
The approval chain has a nasty habit of bottlenecking at the worst times.
Pre-set workflows automate this process. This means the right people will see the contracts exactly when they need to.
Some software will also include version tracking. This will help you confirm that everyone is on the same page for the final document and easily refer to earlier versions as needed.
If you’re facing these challenges:
- Ensuring everyone is working from the correct version
- Keeping track of who needs to approve the contract
- Spending a lot of time hunting around shared drives/email for the latest version
- Having a hard time comparing different versions of a contract
- Lacking a single source of truth
You should look for software that can:
- Send automated email notifications
- Set permissions and roles for different users
- Track versions
- Easily create redlines
- Create pre-set groups of stakeholders in the contract approval process
- Filter approved, pending, and rejected contracts
- Allow you to customize your dashboard to quickly see a status report
3. Contract Execution and E-Signatures
Now that you’ve gotten the sign-off from the suits, it's time to move on to the next step in the contract lifecycle: execution.
Contract execution is the moment when all parties have signed the document and the contract becomes legally binding.
Contract management software can automate this process and keep track of contracts once signed.
Gone are the days of faxing, printing, scanning, or sending contracts by mail. Now, e-signature software can get contracts signed at the drop of a hat.
If you’re facing these challenges:
- Making sure the right contracts are being signed by the right people
- Incompatibility between e-signature software and contract management tools
- Having to chase down different people to get things signed
- Missing signatures during the execution phase
You should look for software that can:
- Allow you to launch the signing process right from where you’re managing contracts
- Fully integrate with leading e-signature software like DocuSign or Dropbox Sign
- Give you a dashboard with status updates and missing signatures
- Autofill signatures across a contract
- Automatically update your records with the signed version when it’s done — and keep the unsigned version for reference
Take a look at how straightforward assigning e-signature tasks can be.
4. Contract Tracking and Obligation Alerts
Tracking and obligation alerts help you stay on top of contract renewals, deadlines, and payments.
Some systems will even generate reports on all upcoming obligations. This will give you a bird's-eye view of everything that's in the pipeline.
If you’re facing these challenges:
- Missing price increases, discounts over time, cancel-by dates, and contract renewals
- Sending multiple reminders through multiple platforms like email, SMS, or web-based dashboards
- Trying to track dates and obligations in Excel and finding it’s getting too complicated
You should look for software that can:
- Easily create customizable reminders for any date or milestone
- Send email notifications
- Customize the message going out with the reminder
- Repeat reminders with regular frequency (e.g., sending reminders every week for three weeks)
Staying on top of key dates is a breeze. See for yourself.
5. Centralized Contract Repository
Ever wish you could Shazam your contracts? With the right contract management tools, you can.
Say goodbye to the dusty filing cabinet.
Contract management software keeps all your documents in one place, so every document you need is only a few clicks away. A centralized repository will also allow you to search for specific clauses or terms across all your contracts.
Online document storage can be a lifesaver when you’re trying to track down a provision that you know exists but can’t remember where it’s located.
If you’re facing these challenges:
- Messy contract storage
- Difficult-to-use tools
- Unused features that are being paid for
- Unsecure digital storage
- Scattered attachments, amendments, and other documents
You should look for software that can:
- Organize documents automatically
- Create custom fields for tracking and reporting
- Assign unique IDs and tags to specific contracts
- Store attachment and supporting documents together with signed contracts
- Be accessible even for non-tech-savvy staff
- Easily migrate data and documents
Check out how easy organizing your documents can be.
6. Best-in-Class Security
Keeping your contracts safe is important. After all, they contain sensitive information that could be damaging if they fell into the wrong hands.
When you’re looking for a contract management software, make sure to find one that offers best-in-class security features. This includes things like data encryption, multi-factor authentication, and role-based access control.
If you’re facing these challenges:
- Contracts contain a lot of vulnerable information
- Fear of data breaches that could lead to major lawsuits and loss of customer trust
- Making sure the wrong people aren’t looking at documents
You should look for software that:
- Uses ISO 27001 and PCI DSS certified data centers
- Offers automatic off-site backups
- Allows for two-factor authentication
- Has a S0C2 certificate
- Provides bank-level 256-bit AES encryption
- Includes malware and virus detection
7. Customizable Roles and Permissions
Only the people who are supposed to be viewing documents should have access to them. Not securing your contracts can be devastating. From costly HIPAA violations to business-busting data breaches, the risks are very real.
That’s why it’s vital that contract management software offers customizable roles and permissions. This way, you can control who has access to which documents and features.
If you’re facing these challenges:
- Accidentally deleting key users
- Ensuring only the people with permission to view files are viewing them
- Users editing documents they should not be able to edit
- Paying for costly per-user subscriptions
You should look for software that can:
- Set read-only permissions
- Allow for unlimited users with no extra costs
- Edit roles and permissions
- Set no-delete users
Setting permissions has never been easier. Take a look:
8. Streamlined Search Features
Contract management systems make it easy to find exactly what you need. But the best of the best will take it one step further with a feature called optical character recognition (OCR).
OCR is a miracle of modern computing.
Need to search metadata? Done.
Can’t remember if you saved that contract as a Word document or PDF? No problem.
That contract you took a picture of at lunch last week? OCR can find that, too.
If you’re facing these challenges:
- Lacking quick access to contracts and documents
- Current search tools cannot comb through all types of documents
You should look for software that:
- Has OCR functionality
- Can sort and export key info and documents
- Allows you to find documents with just a few keywords (even if they’re spelled incorrectly!) by metadata
See how powerful OCR can be below.
9. Easy Integration
Your contract management software needs to play nice with other tools. That way, you don’t have to worry about creating separate databases or losing any data.
Whether you're using CRM software like Salesforce or HubSpot or e-signature software like DocuSign or Dropbox Sign, you'll need to integrate your contract management software with other platforms.
Not only will it help you streamline the contract management process, but you’ll also score some major points with your IT team.
If you’re facing these challenges:
- Incompatibility between file formats or other software and your contract management system
- Pulling data from your CRM can be a headache
- Difficulty managing documents across multiple platforms
You should look for software that can:
- Integrate with the software you use regularly
- Store and organize documents of different file types
- Autofill contracts with data from your CRM
Why Use Contract Management Tools?
Contract management software can save your business time and money. It's as simple as that.
Here’s how each of your teams can benefit from contract management software.
Legal
In-house counsel can use contract management software to track deadlines and automate renewals. It can centralize all their client contracts in one place.
Legal contract management software can also help you stay ahead of pesky regulations.
Procurement
Automating your contract management processes can help your procurement team save time and money.
E-signature functionality is a lifesaver in the approval process. And vendor contract management software that tracks spending can make your budget easier than ever to follow.
Sales
If your sales team is using a CRM tool like Salesforce or HubSpot, you'll want to make sure your contract management software integrates with it. That way, your sales reps can access customer contracts and add new deals to the contract management system with just a few clicks.
IT
When it comes to software contracts, your IT team should be involved in the negotiation and review process so they can provide input on licensing terms. This will ensure the software will work with your company's existing infrastructure.
Finance
From a financial perspective, it's important to have visibility into all your company's contracts. Cloud-based contract management software can help you identify opportunities for cost savings. It can even flag payments that are due soon.
Contract Management Tools FAQs
Still not sure if contract management software is right for you? Check out some frequently asked questions to solve your contract management woes.
What should a contract management tool do?
A contract management tool should help you automate and streamline the contract lifecycle, from creating and negotiating contracts to storing and tracking them.
How much does a contract management tool cost?
Contract management tools vary in price, depending on features and scalability. Some tools require an additional fee per user, while others include a certain number of users for no additional fees.
Is there a difference between contract management software and document management software?
Yes, there is a difference. Contract management software focuses specifically on contracts, while document management software can be used to manage any document.
What are the benefits of using contract management software?
Benefits of using contract management software include:
- Increased efficiency and productivity
- Reduced costs
- Reduced risk of errors
- Improved visibility and control over the contract lifecycle
- Better organization and tracking of contracts
Is Contract Management Software Right for You?
Not sure if contract management software is right for you? Here are a few questions to help you decide if contract management software is right for you:
- Do you need help tracking or managing your contracts?
- Are you manually creating or storing contracts?
- Do you need help ensuring compliance with contractual obligations?
- Would you like to automate contract processes?
- Do you need better visibility into your contract portfolio?
If you answered yes to any of these questions, contract management software might be a good fit for you. Schedule a free demo with us to learn more today.
.svg){kind=logo}
.svg)
