1. Create templates
Creating contracts takes a lot of time – even for those who draft the same type of contract over and over again. Even if the same type of contract is used repeatedly, you often start by copying and pasting content. Afterwards, the entire agreement is usually read through to make sure that nothing unwanted has changed.
In other words, a quality assurance process is performed every time you create a new contract, which is extremely time-consuming.
The solution is contract templates! Regarding recurring contracts such as e.g. purchase agreements and employment agreements change only certain parts from contract to contract. Price, salary, notice period, contractual parties and perhaps the object of purchase. By creating a template, you protect the agreement from changes to the parts that should not be changed each time and eliminate the need to review the agreement thoroughly after each draft.
With a web service that supports agreement templates you solve the problem easily!
2. Streamline processes for internal approvals
It is often said that time is money, and that is also true. Many companies lose time and money by not streamlining internal approvals for contracts.
Basically, it really often looks like this. The contract is created, negotiated and ready to be signed. Before the agreement is signed, it must usually be approved by the CEO or other management.
In fact, it is not the contract creation or the actual signing that takes time, but the time between creation and a signed contract. You can say that there will be a temporary stop in the process, which may risk the deal not even happening.
Once you've created templates for your recurring contracts, streamlining contract approval processes becomes easy. Basically, the authorized person or persons only need to approve certain parts of the agreement. This allows you to take your contract management to the next level.
3. Start with electronic / digital signing
Once the agreement has been created and approved, the signing process begins. Manually signing contracts takes a lot of time. All pages of the agreement must be managed, indexed and archived.
Manual signing also means that it takes a lot of time to sign the agreement itself, you need to print the document (which is also not good for the environment), often a wad of paper needs to be sent by post to another city or even another country. That particular part of the process can become quite painful if there are many people who have to sign the document.
Using electronic signatures instead has many advantages. This allows you and your employees to minimize the time spent handling paper. You do not need to scan the agreements. you can reduce or even eliminate costs for printing, manual preparation and mailing of paper. In addition, electronic signatures are more secure (how difficult is it really to imitate one's manual signature?).
But what about electronic signatures? Are they legally binding?
The answer is YES! Electronic signatures are legally binding in 99.99% of cases. They comply with the regulations developed by the EU (Regulation 910/2014 – eIDAS) and in the USA (Global and National Trade Act . ESIGN and Uniform Electronic Transactions Act – UETA)
Ok, but what about the 0.01 percent? In some rare cases, there are regulations and form requirements for agreements, e.g. purchase agreement for real estate and housing.
4. Keep track of all your contracts in one place
Many companies that lack a contract management system are also often missing their contracts. In fact, an average of thirteen percent of all business contracts have mysteriously disappeared. The reason for this is simple: Agreements are often spread throughout the organization. Some are in binders, some in the cloud and some are even only in an individual employee's inbox (for reasons of space, you also sometimes delete your inbox from older emails). This makes it easy to forget where the specific agreement is stored.
For this very reason, companies need a system for storing and archiving contracts. Since agreements are often tools for maintaining a good relationship with other companies, the consequences of a lost agreement can be devastating for the business.
5. Get a contract management system with calendars, reminders and alerts
Today, many companies experience a lot of pain in connection with a lack of overview of their contracts. The problem is the same no matter how big the company is. You basically need to read through all agreements to remember the contractual legal bases and obligations with each individual agreement.
One reason for the lack of overview is of course – as mentioned above – that the agreements are spread across the entire company. Another reason is that it is basically impossible to get such an overview without the help of a digital solution, which is also the reason why physical documents in a physical archive are not such a satisfactory solution.
The solution to this problem is incredibly simple. When each agreement is signed and entered into, you register it in a contract management system. The system automatically schedules reminders and alerts you before the contract needs to be renegotiated or terminated.
Because reminders and warnings are available and generated in one place, you get a simple overview of which contract-related actions you need to perform in the coming time. To reduce the risk of you missing to take action, several people can be reminded and the system also escalates reminders to upper management.
Hope this article opened your eyes a little more to what a digital contract management system can actually do for your business.
In any case, I am sure that these five tips on how to improve your contract management will increase your productivity and reduce your costs.
Less administration and more time for business, making you more profitable!
Please get in touch and we will show you how DealManager can help you.