Contract Management: What Does the Best Software Need to Have?

The management of contracts in a company is essential within the terms of professional ethics because here the legal and most important documents within the company are controlled and determine the deadlines in which the activities must be fulfilled for both employees and customers

The management of contracts in a company is essential within the terms of professional ethics because here the legal and most important documents within the company are controlled and determine the deadlines in which the activities must be fulfilled for both employees and customers making the machine work effectively.

Each file that a company has is of great importance and that is why there are specialized areas such as administration and finance that are responsible for enforcing each contract that the company has. Like everything, the way of working has evolved considerably; while in the past contracts were kept in huge files classified by dates or dispositions, it could bring some problems because they could be lost, or attention was not paid to certain details since having so many papers the disorganization was present and at the time of an audit could cause complete chaos. Today it works completely differently for many companies and we will tell you what features the software that is effective for you should have.

1. How contract management should be done

Man working on laptop with book next door for contract management.

With the help of technology, a company’s contract management has evolved considerably thanks to contract management software (CLM) and there are many options with different functions, features, and benefits. But you should know that the one you choose, must have at least these four basic functions: storage, tracking tags, criteria filtering and alerts for notifications of important dates and events.

To choose the best contract management software for your company, we have prepared a list of tips so you can evaluate which is the best for your business.

Cloud Archive

  • Regardless of the software you choose for the management of contracts of your company, the file in the cloud is essential, since all the files from contracts, agreements, subscriptions among others, can be handled more easily as well as access to them is much easier.
  • The storage capacity must be large enough and have the possibility of being able to expand it so that the documents are not lost.

File label

  • File tagging is another feature that your contract management software should have; these should be customizable and for those that are already predetermined, you must make sure that they are easy to understand for all employees who must have access to these files.

Updated with the law

  • All the contracts of your company must be up to date with the legislation and updates of the laws, otherwise, you will not be able to make a correct management of the contracts. Laws often undergo modifications, so your software must ensure constant updating. The programs that have this function are able to identify these modifications and launch an alert to the corresponding area through an email, avoiding subsequent problems.
  • Must be synchronized automatically for proper contract management
  • The software must have the ability to synchronize automatically to send you the relevant notifications regarding the highs and lows, in addition to showing the metrics that will streamline the work and internal processes of the company.

2. A contract management software should be intuitiveand easy to use

Man working in an office with tablet and agenda as an example of contract management.
  • Contract concepts are complicated in themselves; that is why your contract management software should be easy to understand and manage, in which you can write and update your files keeping informed at all times of the changes that are generated at all times. This will represent considerable time-saving.
  • The objective of investing in contract management software is that it should help you streamline daily tasks and optimize the time you spend on document management, so the way of use must also be effective.
  • The main idea of having a contract management program is to provide you with help to streamline the daily tasks of the company and optimize the time required to the administrative area of the documents, it is for these reasons that your software is really effective.

3. What are the benefits of contract management software?

Woman with cell phone and laptop with cup of coffee and glasses, as an example of contract management.

The benefits of having a contract management software in addition to helping you optimize time offers other advantages:

  • You can maintain a standard in creating contracts by employing terms, conditions, and laws that apply to various contracts.
  • It tracks the time of approval of contracts, which allows you to continue receiving the benefits and services that have been previously contracted.
  • Send automatic alerts for contracts to be reviewed or signed.
  • It maintains a periodic review of the fulfillment of the contracts so that the company avoids falling into legal breaches.
  • It is of the utmost importance to have a contract management system in a company because it not only prevents legal damages but also contributes to the alignment of the budget and the objectives of the businesses that your company manages.

4. What are the steps to follow to carry out a contract and give it correct management in its duration period?

Cell phone on red agenda with the indication signature here.

For the management of contracts to be adequate, some steps must be followed:

The main steps in this management are:

Creation of contracts

  • The first thing is to set the startup request. Here the necessary contracts and documents that support the links between the parties are identified.

Collaborative stage in contract management

  • At this time the negotiation of the terms of the contract happens. After drafting the contract, employees should be able to compare versions of the contract and note any discrepancies to reduce the discussion time between the parties.
  • Here come the negotiations of the terms of the contract. Discrepancies that may exist are discussed.

Contract approval stage

  • In the approval stage, greater delays usually arise, so you must prevent having an adequate flow of information and work. When you pass this stage, it is time for the signature.

Monitoring stage

  • This is a process of review and modifications; as long as the contract is extended, it is of the utmost importance to follow up on the clauses so that they are developed and fulfilled correctly.

Renovation stage

  • If the contractual relationship is maintained, the contract may be renewed; either for the same duration as the previous one or for more. Otherwise, at the end of the established time of the contract, both parties terminate their relationship and the contract is null and void.

Having a contract management program is extremely important for a company. In addition to preventing legal complications, it is fundamental in the process of aligning budgets and in the achievement of the objectives proposed for the business.

Has this information helped you? Let us know by leaving a comment.

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