Negotiating contracts is critical to business success because the terms of the agreement spell out the details of high-value transactions. One misstep can lead to serious financial loss. Historically, the contract management process has been ad hoc, with different areas of the organization following different guidelines. Most of the final documents were in hard copy, and the copies were stored in dusty filing cabinets.

Outdated methods of contract management allow important details to be overlooked. Fortunately, advancements in contract lifecycle management software have changed the way business is done. New technology automates processes across the organization, helping to standardize best practices across the organization.

But what do we call Contract Management?

The term contract management is generally used in procurement or purchasing departments. As part of the purchasing department’s responsibilities, the manager negotiates, accepts, and signs contracts with suppliers of goods and services to the organization. Contract management is the process of ensuring that the supplier meets the negotiated contract terms. While procurement in the negotiation process is an essential part of a cost management process, contract management is where actual savings are made or missed.

Effective contract management practices translate into lower operating costs, efficient services, and a stronger negotiating position in the next round of negotiations. Contract management involves:

• Ensuring contract compliance.
• Acting as the primary contact for service issues and dispute resolution.
• Managing payments or terms negotiated in the contract.

In short, finance teams need visibility into contracts on a daily basis. Contract Management software can help them precisely on this point.

What is contract management software?

Contract management software, or contract lifecycle management (CLM), allows contracts to be monitored continuously in an automated manner. It also optimizes each stage or level of the contract lifecycle—nothing complicated in all of this.

The real question is rather: why is this type of solution necessary? Here too, it is very simple: because contracts are the pillars of the company. They manage risk, relationships, and, to some extent, income. They are there to be used or exploited to benefit your business and its business partners.

In a medium-sized business alone, you can have tens of thousands of active contracts at any given time. And what if this company stores these documents in computers, servers, USB keys, or even storage cabinets? How do you know what’s in all these contracts?

It is almost impossible. It is due to this reason that all companies must have effective contract management software to:

• To support the improvement of risk and expense management;
• Ultimately, to contribute to the results.

How is contract management optimized with technology?

CLMs automate contract management using technology.

How? ‘Or’ What? Thanks to smart features! And in particular these:

Contract validation workflows (also called circuits): You can set up contract validation circuits, depending on a certain amount, for example. All contract approval requests are tracked and centralized. Important contracts will always be validated by the people concerned.

A smart search engine: By “smart,” we mean the ability to extract key information from your contract portfolios, such as dates and amounts. So, if you have any questions about the contracts, the information is accessible with just a few clicks.

Reports & dashboards: You take advantage of a 360 ° view of the contractual activity of the company.

Automatic reminders of deadlines: You are automatically notified in advance of the renewal dates of your contracts, which makes it possible to avoid tacit renewals and allows the contracts that interest you to be renegotiated in due time.

An excerpt of key contract data in Excel: You have the choice of exporting to Excel to quickly extract key data from the contractual portfolio (which artificial intelligence recognizes by it). Everything depends upon you to analyze to make the right decisions.  

Various websites offer Contract Management Software Services; you can visit those websites to know more about their services