How to Manage Contracts Better
A customer recently asked if they should automate their contract management processes. This is an important question. Contracts are at the heart of many businesses. They affect all organizational levels and many day-to-day activities. Yet there are only a few organizations that manage these important documents in a careful and effective manner.
During the pre- and post-signing periods, contracts are often stored both electronically and on paper. In addition, the contracting parties are often spread over several departments, including legal, procurement, sales, accounting, etc. These each store their own copy of the contract, which can lead to different versions. Organizations also struggle to keep track of deadlines and general contract terms. This often leads to missed or unwanted renewals, excessive spending, and other unwanted results. These issues are driving many organizations to look for software solutions to automate and simplify their contract management.
Are you ready?
To help organizations identify their need for contract management automation, we ask three questions that serve as a guideline:
- Having trouble finding contracts? In the past, contracts were often kept in paper form and managed through spreadsheets to track important deadlines and milestones. A recent survey conducted during an M-Files webinar showed that many organizations perform contract management in a combination of paper versions and versions stored in network folders. This multiple storage can be problematic for those responsible for contract management. How do you quickly find all the contracts that expire in March or the contracts of the past ten years with a particular supplier? In our data-driven world, it’s important to have systems that can present contracts based on their role and function… that is, based on “what” they are. Metadata plays an important role in this because it adds information to a contract, such as the contracting parties, the terms, the effective date, the subject services or products, etc. All these metadata values can be used as search criteria to search, filter and present contracts . In short, you can search for contracts based on ‘what’ they are (identification criteria) rather than ‘where’ (in which folder) they are stored.
- What does the workflow routing of your contract look like? This question is simple. If you answer “emails, inboxes and/or printers”, you should seriously consider implementing a contract management automation solution. Papers get lost or end up in the wrong file, e-mails are overlooked or ignored. With a solution like M-Files, which automates contract review and approval processes, organizations can manage their contract files much more accurately and efficiently, ensuring that the right people are reviewing and approving the files and avoiding missed contract installments, milestones and deadlines. Many companies we work with have adopted M-Files to automate the sales contract approval process. To promote price compliance so that unauthorized rates are not approved and to reduce negotiating and signing time and reduce transaction costs.
- Is the contract data visible and suitable for reporting? If you answer “no,” you probably, like many other companies, rely on a combination of email, the contract manager’s memory, paperwork, and certain data from the ERP system. Solutions like M-Files, which integrate seamlessly with other core business systems, directly address this problem. You can easily access the data from different systems and do not have to worry about duplication of files and the creation of multiple versions. An appropriate automated contract management system aggregates key data stored in various systems and repositories into an easy to process format suitable for reporting.
If the situations mentioned here also occur in your company, then I encourage you to take a look at M-Files Contract Management. It is an easy-to-use out-of-the-box solution for automating your contract procedures and risk management.
Would you like to know more about contract management automation?
Check out our Document Management page!
Since 2003, PeopleSense has established itself as the definitive ERP and single source workforce management solution provider for businesses of all sizes throughout the U.S. and Canada, offering consulting for Made2Manage® (M2M®) and Intuitive ERP®, Axis Metals®, Sage HRMS, time and attendance solutions, Acumatica, and related services and products. PeopleSense provides clients with the peace of mind that comes from working with experienced consultants dedicated to customer service, who are affordably priced with no annual contracts. PeopleSense is a team of ERP consultants, who support a variety of solutions and have over 450+ years of combined experience. We are not associated, partnered, or affiliated with Aptean. Reach out to get your business software questions answered.