You can create, sign, and track contracts quickly and efficiently. Contract workflow is the process of managing a contract from its initiation to completion. Initially, it may seem simple but various difficulties often arise throughout the contracting process and to completion. You have to go through many steps, including the following:
- preparation of information;
- creating the contract;
It is very important for a business to get the contract workflow right. There are usually quite a few employees involved in this process. The goal should be to move the contract forward from inception to completion.
Main Stages of the Contracting Process
Contracting is often an extensive process. You need to become familiar with each step before you optimize it. That way you can understand what you need to do to improve the contract lifecycle. Let’s look at the basic steps of the traditional contracting process:
- Preparation. Contracts are legal documents, so it is very important that they are carefully prepared in accordance with local law. In addition, the contract must be drafted to meet the needs of each party.
- Contract drafting. Any contract should be reviewed by lawyers. Otherwise, the contract may be considered risky. When doing business, it is best to have a team of in-house lawyers. There are contract templates in the Pandadoc template library.
- Contract Approval. Before a contract progresses to the final stage, it must be signed by multiple stakeholders. Every company has structured approval processes. All major parties have an opportunity to review the agreement and sign it before it is taken to the next stage.
- Contract negotiation. Negotiations can take place at any stage but they usually begin when the agreement is finalized and all parties have a chance to review the contract. If a traditional paper contract is to be signed, there may be an indefinite number of revisions. This will create several versions of the contract. Digital documents are used frequently in both small and large businesses, so it is much easier to get the information to each party.
- Final Signing. When final signatures are required, participants should have no questions. The contract can be renegotiated by all parties involved and this is usually the end of the negotiations. It is important that both parties are satisfied with the terms of the agreement. Modern businesses prefer to use an electronic signature to close the deal.
- Amendments. Even after a contract is formally finalized, changes and amendments may be made during its lifecycle. This is usually because there is a need to make changes to the original contract. Any actions should be tracked so that the contract can be legally verified.
It is equally important to pay attention to the expiration date of the renewal. If such a clause is included in the contract, then each party will have the opportunity to renegotiate existing contracts on favorable terms. New agreements can also be concluded on this basis.
Importance of Renewing Contract Workflows
It is a well-known fact that the contract management process is usually a complex and time-consuming task involving a lot of planning and effort. Therefore, any business entity must establish a contract management workflow that is appropriate for it. When business entities have a defined contracting process, they will enjoy the following advantages:
- reduced costs;
- increased efficiency;
- reduced contract management risk;
- reduced time expenditure.
The advantages listed above will greatly improve the transparency of contracts so you can make all relevant decisions more efficiently.
Automated Contract Processes
Consider the main ways in which a company can benefit from an automated contracting process:
- Risk Reduction. When generating a contract, the biggest risk comes from data management. A company that uses reliable contract management software can be confident that it collects the right data, stores it, and can track each document. A virtual repository simplifies the information transfer process significantly and reduces human error, so contract risks are reduced.
- Fast entry into the marketplace. If you choose the wrong contract workflow, it can slow down other processes. If you want to speed up time to market, sufficient attention must be given to the contract management process. This is where automation helps. If you implement it in contract management, accordingly, you can speed up approval and get to market quickly.
- Increased productivity. Managing the contract process manually is always difficult. In addition, it takes a lot of time. Contract automation optimizes the management process and saves time.
Implementing automation in the contract management process is always a great solution for any company irrespective of how big or small it is. This is an excellent way to draft, negotiate, and sign contracts quickly and reliably without unnecessary delays or challenges. As a result, the business entity can enjoy improved performance, long-term reliable cooperation with its partners, and get stable profit from its activities.