Lisa Fordham, Negosentro | Too often, businesses underestimate the hassle of the contract process. Contracts aren’t meaningless agreements; they are legal documents that benefit your business in concrete ways. By paying close attention to your contracts throughout their lifecycle, you stand to benefit even more – but few businesses have the luxury of devoting time and energy to contracts when there are more pressing business actions to attend to.
Enter: contract management software. You can effectively outsource the monitoring of your contract lifecycle by investing in the right software tools. However, not all contract management tools are equal; here’s how to know what you need from your contract lifecycle software.
Manual contract management is an extreme chore. Small businesses must devote a significant portion of their resources to maintaining a healthy contract lifecycle, and large businesses must build entire teams for managing the flood of documents flowing in and out. Automation within contract management software eliminates the need for such time and expense by programming certain critical steps within contract lifecycles. For example, high-quality contract management tools should come with these automated features:
- Negotiation. Perhaps the most important step in the contract lifecycle, negotiation is made easier by contract tools that automatically send and receive contract information, such as similar terms in existing contracts.
- Approval. Automated approval facilitates the contract generation process by sending documents directly to those professionals it concerns, skipping middlemen and allowing parallel workflows.
- Milestones. Whenever a contract approaches a new stage in its lifecycle, your contract management tool should automatically send you an alert. For example, if a contract is on the verge of expiration, the software should notify you – and perhaps provide advice regarding renewal or termination.
The data contained within your contracts are some of the most valuable and important data to your business. Your contracts include sensitive information, including employees’ and customers’ personal and financial information, your vendors’ prices, and your business’s strategies. Thus, it is imperative that your contract management software keeps your contracts safe with effective security features. Some of the most important include:
- Access control. A contract database administrator should be able to assign permissions to different users to limit the inappropriate review or spread of contract data.
- Activity tracking. Also sometimes called audit logging, activity tracking allows you to monitor who is entering the contract database, making changes, and/or downloading documents.
- Encryption. Hiding data behind an incomprehensible code is a simple but effective way to keep hackers out of your contracts.
Without sufficient security built-in, your contract tools are less than useless. Security is on par with price when it comes to contract management software.
Closely related to the security features are those pertaining to compliance. One research firm determined that more than 60 percent of corporate litigation in the U.S. and U.K. is the result of contract breaches. Contract management tools should be able to track contract history and audit contracts for compliance of terms. Performing this task manually requires full-time effort, even at a small business; it is far more efficient to use a computer program to manage this load.
What’s more, many industries have strict rules regarding how businesses can handle data, and concerned with the increasing rates of data breaches, many more industries are developing compliance rules every year. If you work in or with an industry that requires compliance in contract management – such as the healthcare industry or the financial industry – you need to be certain that your management software can deliver the features you need.
Finally, a feature not necessarily built into your contract management solution but one you need nonetheless, comprehensive customer support will ensure that your contract management tools provide the precise functions you require. The more sophisticated a software system, the more opportunities it has to malfunction, potentially jeopardizing your data. Your in-house tech team might be able to identify and resolve issues, but access to a service skilled specifically in your contract management software is vital for maintaining performance. When you can contact your software’s support and immediately troubleshoot problems, your contract process can carry on smoothly – and so can your business.
Contracts are important, and contract management software is just as important for businesses hoping to streamline their contract process. While shopping for contract management tools, remember these important features to acquire the perfect solutions for your growing business.