According to a report in the Journal of Contract Management, only 71 percent of companies couldn’t find at least 10%of their contracts. So, the question arises where did all the contracts go or what happened with them. Misplaced contracts mean you cannot say with much accuracy what your company is obligated to or what you owe in money or services. You could be violating contract terms you are not even aware of, leading to at least a damaged business reputation and worse, legal damages and court costs. Unethical or disorganized business practices can cost a company thousands in lost revenue, litigation, and irreparable reputation damage. The vast majority of transactions are tied to any sort of contract. A contract mishap can change a company’s direction or strategy, or even damage it to a severe condition.
An easy and cost-effective way to avoid this is to use contract management software to store, manage and even draft contracts. Implementing a contract management software solution can help minimize and manage some of the risks associated with contract compliance. It helps you control and monitor the status of your contracts and keep up with deadlines. With it, you can track changes in contracts and share them with coworkers and clients.
Contract management is an ongoing process. From the initial time, the ink dries on the signatures until the contract is completely fulfilled, ended, and archived, it’s the responsibility of appropriate departments to keep track of them. While this old-fashioned filing system is still necessary for important paper documents, digital contract management is the best way to stay on top of contract management.
We are going to discuss now that what should be the basic requirements for the custom software programs in order to organize the contracts.
Basic Requirements for a Contract software program
There are many contract software programs available here, ranging in complexity and price. A contract management system should provide at least these basics:
- Stores copies of executed contracts.
- Allows access to stored contracts only to those you identify.
- Allows you to search for contracts based upon attributes important to your company.
- Automatically sends e-mail notification when key dates in the contract occur.
Storing electronic versions of contracts is a good backup for your hard copies. Any employees who need to work with the contract can access it from their computers. This makes it less likely that the written copy will be lost as it’s being used or copied during the time the contract is in effect.
Most of the contract management software allows the system to be set up to allow access to each contract by a defined set of users or only those with passwords set up by an administrator, providing both ease of use and security. Some of the notable merits of using a Contract Management software are as following:
- Time Saving
Searchable fields within contract software can prove invaluable in standardizing pricing, delivery, and other business terms. Searchable fields can also be a time saver for identifying all your company’s obligations, payments due in a specific time span, customers in a certain area, etc.
In the most basic contract software, such as Contract Advantage by Great Minds Software and Contract Assistant by Blue Ridge Software, you can search stored contracts for dates, names, dollar amounts (all contracts over $10,000), and certain clauses (all contracts with insurance requirements). The more complex software allows keyword searches and lets you customize search fields.
- Money Saving
The most valuable and one of the most informed programs may well be their ability to send e-mail notification of a contract’s key dates. Often the most important of these dates is the contract’s impending termination or automatic renewal. Your company may have a contract with favorable terms that you wish to renew but that requires the renewal to be activated a certain number of days before the contract’s termination date. Miss that date, and you will be stuck renegotiating and unlikely to obtain similar favorable terms.
- Gives a centralized repository
Contract management software exists to provide a centralized repository that stores all important information related to a contract. When you need to reference an agreement or complete a review, all the information you need is right at your fingertips. Some systems will allow you to customize your naming conventions, customize the fields that you want to track and store unlimited amounts of data and documents. Many systems will also allow you to search and report on any information stored in the system, which can provide important business analytics and aid in the audit process.
- Provide proper notifications and alerts
Most systems also provide alerts regarding key dates, tasks, and contract milestones in order to keep you aware and sound with the time-to-time happenings. Timely alerts allow you to make and receive payments on time, complete appropriate reviews, submit forms, and complete assigned tasks to ensure thorough and responsible business practices. Some systems also integrate with your e-mail and calendar system to ensure that you’re seeing the alerts in time to take action for the betterment in your daily work.
- Not only basics, but it covers more
Other contract software programs, such as Realyst Contract Management by RealContract or Contract Performance Management Software, can track completion dates; provide approval monitoring; print barcodes for tracking purposes; track each time a contract is e-mailed, printed and accessed; assist in contract drafting by storing standardized terms that can be linked together; store contracts in different currencies and languages; and allow multiple parties to draft and review contracts from remote locations. Some contract management programs are also based on industry-specific thinking methodologies, such as providing safeguards to meet HIPAA for the healthcare field or Sarbanes-Oxley for publicly traded companies.
- Improvise the security level
Contract management software also enhances the security of your contracts. The certain software allows you to lockdown sensitive and confidential records, documents, and personal information to limit security risks and data breaches. Many systems will also allow you to customize user permissions to ensure that data is only being accessed by individuals with the proper authority to view that information. Some systems also provide a full audit trail to track contracts, reduce risk, and hold employees accountable for any changes they make.
If the organization currently struggles with compliance, a contract management software product could be a worthwhile investment to enhance the functionality and success of your business. Creating a positive compliance culture at your organization ensures that you meet or exceed your service commitments, preserve your organization’s reputation, foster strong vendor-client relationships and retain a loyal client base.
So, what is Right for You?
Enter in the world of contract management systems in a search engine, and it will return a long list of software systems to review. There is a very useful contract management software directory at some of the reputed websites that allow you to search for systems that meet your specific requirements. Most of the companies only provide a free trial period in which you can test the software easily and make your mind. Any company with more than 10 contracts will benefit from a basic contract software program. It’s one of the cheapest forms of insurance you can buy at the moment.