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Automation of Contract Management: 8 Ways to Increase Efficiency

Ever feel like you’re spending more time managing contracts than getting real work done? It’s time to automate it. 

According to Goldman Sachs, automation of contract management could speed up negotiations by 50%, minimize erroneous payments by up to 90%, and cut processing costs by up to 30%.

Take this case of a telecom company:

Tele2 legal team would have been able to draft 2 NDA per hour maximum, so 100 NDA would have taken them around 50 hours. Since contract automation has been adopted, business units are drafting and signing NDA’s themselves on the platform and it takes around 5 minutes for each.

In this post, we put together 8 ways to automate your contract management workflow process so you can focus on other aspects of your business.

But first things first.

What is contract management automation?

Contract management automation is the process of optimizing your contract creation, management, and execution via digitization and collaboration.  

Automation of contract management makes it easy to see what is happening with each one of your contracts. It lets you create and manage your documents from one place and keep track of all changes made on each contract over time.

Tracking important information is transparent here — like who changed what document and when — removing confusion about which version of the agreement everyone has agreed upon. Or if there was a need to search a contract’s old versions or compare files before making updates, your contract management software would make it easier than ever. 

What are the benefits of contract management automation?

  • Improve efficiency 

Using the pre-approved templates helps you start the draft faster by 83%. After the draft is ready, you can follow up automatically since all the communication — negotiations, amendments, and data input — happens in one shared environment only. Finally, since it only takes an e-signature to execute a contract, clients do not need to be physically present when signing. No need to scan and send back the printed documents either. 

  • Save expenses

Did you know that the average labor cost for a basic contract is $6,900? Mark it up to $49,000 for more complex agreements. Reviewing and managing contracts can be expensive! Contract management automation helps you sign contracts up to 6 times faster and this saves you a lot of money in the long run.

  • Increase work value 

Spend less time going back and forth for follow-ups and more time on your business. This way, your department can focus on its core function. The right contract management software should eliminate renewal delays, automates the follow-up, and makes signing simple.

  • Control access

An automated contract management system with 24/7 document tracking ensures complete visibility of the signing process. Have complete control over the contract lifecycle instead of dealing with lost documents and depending on former employees.

How to automate contract management: 8 ways to do it

How to automate contract management: 8 ways to do it

1. Centralize a database of contracts

A centralized database of contracts saves time for different departments collaborating on contracts:

  • All documents are accessible to everyone, including the internal team, external partners, and clients.
  • Whenever someone needs access to a document, they can find it in the database that stores new drafts and the latest edits.
  • The available templates are pre-lawyered. Anyone who uses the premade documents can be sure that they’re using compliant contracts in the latest versions.
  • There’s a clause library that saves all common and previously used clauses. This way, contract editors don’t need to draft from scratch. You can easily search previous contracts for the clause that you need and include them in your new draft.

How does Avokaado do it?

Contract repository: Avokaado view

 

Avokaado has a contract templates database that is clause-based. This means the contracts are not only stored as whole files but even the smallest data points — clauses — are kept separately so users can easily re-use those for future contracts. 

To create your centralized database of contracts and clauses, log in Avokaado and go to the Store section. Choose any public template, add to your account and start using: draft, tweak according to your own house rules or extract clauses. Another option is to upload your current Word templates to your own Avokaado template library and manage them there.

2. Use automated templates for contracts when drafting

Templates keep documents consistent and accurate. No need to worry about human errors in the draft or starting with outdated document versions. Choosing the template that meets your needs reduces your stress levels. 

Using standard templates quickens your transactions because you don’t need to create a document from scratch or fumbling through your files, chasing around your older templates.

How does Avokaado do it?

Automated contract drafting: Avokaado view

Avokaado has 100+ contract templates you can easily edit and make your own. You can draft a new contract in minutes, even the most complex documents.

In Avokaado your can develop your own contract templates for smart drafting by applying:

  • One-time data insertion
  • Simultaneous drafting of document bundles
  • Automated formatting and styles
  • Default answers
  • Multilingual drafting
  • Country-based scenarios
  • Clause libraries for fast insertion

3. Make use of self-serve contracts

Employees can create contracts without consulting the legal department through self-service contracts. Self-serve contracts drastically reduce time spent on obtaining standard contracts such as NDAs by eliminating the need to ask the legal team every time.

With pre-approved and accessible self-service templates, anyone from the team can be confident and sure that he uses a template where all fields are compliant.

How does Avokaado do it?

All existing templates in Avokaado are proofread by lawyers which allow different teams to build contracts independently. 

To enable other teams to draft contracts you can share the document draft, and your collaborators will receive a unique link from where they can access the document. Depending on their role they can either view what you have generated or edit the document in the questionnaire, give their input or even add additional documents to it.

4. Create approval workflows

An automatic approval workflow simplifies and standardizes the entire contract lifecycle process. Using this approach, the company can spend less time hunting down paperwork and more time doing real work. 

Typically, organizations running at optimal implementation find that contract processing times can be slashed from more than a week to a few hours for requests, expense claims, and approvals.

How does Avokaado do it?

Contract approval: Avokaado view

With Avokaado, the approval process is automated. You can choose to give either approver and/or signer roles to your existing collaborators or invite new ones. Adding an invite message to clarify possible details for existing and new collaborators is possible and recommended. You can also determine the entire flow of approvers and signers and set the order of approvers before you send the document out.

5. Automate the signing process

The signing process becomes automatic using eSignatures. You electronically produce your signature and it captures the same legality as its written counterparts.

With electronic signatures available and included in the document workflow, you don’t need to download a document or have it sent over email for signing. It also saves time by not requiring an account with any digital signatures providers nor paying extra fees for each seal of approval.

How does Avokaado do it?

Digital contract signing: Avokaado view

Avokaado saves you a lot of back and forth during the processing of contracts. Sharing a document is easy and fast. Your collaborators do not have to create an account on Avokaado. They can get access through the shared link. Then decide which signature provider to use— eIDAS compliant Dokobit or SignNow.

No need to personally deliver contracts for signing, the software automates the entire process—all digitally. You can easily manage the documents after signing by adding reminders for renewal or review, or searching and grouping them in the folders.

6. Utilize data-driven document workflows 

Workflow automation increases businesses’ productivity. The automation of document processes also reduces document processing costs. Plus, having data-driven document workflows makes your business more compliant since there’s a proven process that is followed each and every time.

How does Avokaado do it?

Avokaado’s document workflow function based on the metadata extracted from contracts. This means you can enable automatic workflows that are solely based on data. For example, you can create a workflow wherein your employees will receive automatic reminders and email notifications only when needed. You can trigger metadata in certain phases of the contract lifecycle to avoid sending unnecessary alerts. 

7. Perform contract reporting

Contract reports show you an overview of what’s happening to all of your contracts. When you see a contract that’s not moving, you can act on it right away. Centralized data about the entire document workflow helps you understand how you can improve contract delivery. Getting things going and optimizing your processes will be easier with these reports.

How does Avokaado do it?

Contract review and management: Avokaado view

Avokaado has a customizable dashboard that shows you the status and performance of all active contracts. Your Avokaado personal workspace has everything you need to manage data-driven document workflows. You can generate new documents, overview and track their statuses. The workspace shows your deal statistics, displays your critical deadlines and reminders.

This helps evaluate and improve contract lifecycle management metrics, giving a quick view of which contracts are closing and which are stalling. You can easily give an overview to the management on what’s happening, helping your business units to align operations strategically.

8. Integrate contracts through API

The contract management software is cloud-based. It connects with other apps for efficient workflows and collaboration. Cloud apps can now be linked together with API integrations that enable users to create systems internally or externally.

How does Avokaado do it?

With Avokaado, the contracts you create can be integrated through API. Your company can design seamless day-to-day operations like creating contract flows. 

👉 Read this case study to learn how Fairown, a subscription-based financing platform, takes advantage of APIs to update contracts, access and manage signed documents, and streamline the signing process.

What is the best software for automation of contract management?

The management of contracts and workflow can be optimized manually using existing tools, but Contract Lifecycle Management (CLM) tools automate and speed up this process a lot. 

The best contract management software is one that can help you automate your contract management and lifecycle the way you need it to. One that can manage risks, fit your workflow, and give you control over your legal operations. 

Given that all contract management software is easy to use, go for the one that has the legal requirements you need. It is of greatest importance now than ever that your business stays compliant. This is especially true if your business is operating in heavily regulated industries such as healthcare, construction, and telecommunication.

Here are some contract management software options for you:

  1. Avokaado – an all-in-one platform for business and legal teams to collaborate on documents and create them from one location following legal regulations.
  2. PandaDoc – CLM for accelerating the creation, management, and signing off digital documents for fast-growing teams and sales departments.
  3. Ironclad – an easy-to-use platform that allows for collaboration on contracts, better business negotiations, and risk managing.
  4. Agiloft – solution to improving workplace efficiency for businesses, and organizations with deep customization, strategies easily adapt so they can serve a wide range of vertical industries like healthcare or education with extreme care.

On the automation of contract management

The tedious work behind contract management, if not automated, delays the start of your transactions, redirects the attention of your team on trivial tasks, and stops you from hitting your revenue goals.

So it’s important that you automate the handling of your contracts as much as possible—and as early as you can. You can always tailor your automation to your existing processes as you go.

This list of 8 ways to do automation is just the beginning. It’s designed to help you get started the easy way.

Ready to give them a go?

👉 Try modern Avokaado CLM for free for 7 days.

 

02.07.2021

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