An agreement between two or more parties agreeing to particular consent is termed a contract. Most companies operate within contracts that guide them to approach their daily business. The human resource department in organizations mainly handles arrangements; this can be contracted within the organization for the employees and employer and can also be contracted between the organization and the suppliers of different commodities and services. Contract management is the process of creating, analyzing, and executing the contracts, which is done manually or with the contract management software, a digitized system that handles all about contracts in an organization. Contract management software is open in the formulation, negotiation, witness, signature, renewal, and the analysis of data of the contract itself, bringing the business into one pool of thought and agreements.
Critical features of contract management software
There are various types of contract management software available in the market for purchase by potential clients. This software differs in some aspects depending on the work the software has been programmed to do. Some software is customized to undertake different tasks in an organization. Some can be simple contract creation, while others are complex contracts involving several parties with different goals and intentions. Some of the basic features found in the contract management software are;
- They have no limit to the number of users.
- They have no limit to date notifications.
- They have automated speed searches for different categories of contracts.
- They are easy to upload, and they have simple language that one can understand easily.
- They are easy to upload details.
- The role of a user and permissions are also guaranteed.
- They allow for bulk edits
- They have no limit for archive storage
- Amendment tracking available.
There are different software that are recommended for specific tasks in an organization. At the same time, others serve all purposes, and they are highly recommended for a big organization where they deal with a lot of contracts in a day to run their business. These software are classified as according to what they do best like for example;
- Best overall- this software can handle all aspects required in regards to contract management software.
- Best for small businesses
- Best for large companies
- Great for automation
- Great for reporting.
Reasons why you need contract management software
There are many reasons why it is vital to digitize contract management software to provide the correct predictions into contract data. Contract management software saves on time and cuts on the cost with minimal errors. Contracts ensure the services being offered and the products being delivered are of excellent quality for the contracts dictate compliance and uphold it fully with clear indications of what should happen when a breach occurs. The reasons why your business needs to use contract management software are as follows;
- Contract expiry dates
- Electronic documentation
- Authoring of the contract
- Automated booking system
- Contract performance evaluation and compliance.
Contract expiry
The contract should have precise details on when the contract starts and its end date. Having an unclear expiry date automatically leads to an extension of the agreement; this can cause harm to one party which was not prepared to service the contract after its expiry. Expiry dates are significant while formulating a contract; after the expiration of a contract, one can review if the agreement was successful or not and gives leeway to the company to examine the relationship with the supplier. A contract management software keeps tabs on all the details that have been keyed in the system. It keeps track of even the dates and sends reminders when the expiry of a contract is nearing, so it’s hard for a company to forget the expiry date.
Electronic documentation
Most companies still use the paper documentation of contracts; this becomes very tedious, mostly in keeping track of all the arrangements. It is straightforward to lose some office documents with a paper contract documentation system, mainly where there are no proper bookkeeping services. Digitized systems of handling contracts are elementary, effective, consume less time, save on the cost, and keep an office tidy. Electronic documentation enables easy access of the documents at any given time and place. You can access the contact information you need even by the click of a phone, and these are the benefits enjoyed by those who have embraced this technology of contract management software.
Authoring of the contract
When using a contract management software, all solutions are put in place; one does not need to keep typing or drafting the same contract with the same detail each time. Instead, you can formulate a template in the software you can keep using for future engagements. The template must be approved by your legal team and given the go-ahead to prepare other contracts using the same template. With the help of contract management software drafting a new agreement is like leaving the work itself work on its own as you focus on other great strategies in your company.
Automated booking system
The contract management software can self-generate an invoice; this service is fully automated. A client wants to have a particular contract; they will key in the contract and agreements’ details and without encrypting an invoice. The contract management systems give out payment details extracted from the contract. The person in charge of the management software can track all the invoices being booked and monitor all fraudulent actions. Once an invoice has been generated, the system notifies the person in charge and generates a tracking number for the said invoice.
Contract performance, evaluation, and compliance
As an organization, it is wise to have a standard contract protocol to review the suppliers’ performance. This information in the system helps in choosing the right supplier according to the set rules and guidelines. Contract management software ensures compliance between the supplier and the organization. Suppose the contract specifies payments at a specific date. In that case, the system will send reminders to the organization, which acts upon the notification with the immediate effect and notifies the expiry dates. The system helps evaluate the best suppliers who are rewarded by the renewal of their contracts hence strengthening the business relationship leading to business growth.
In conclusion, modern companies adopt the culture of going paperless in their contract management services. They have made sure their contracts are being served digitally with the help of contract management software, which has made work more accessible in a company’s day-to-day operations.
Story by Billy Moris
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