Small repetitive tasks can add up to huge amounts of wasted time when you’re dealing with a high volume of contracts. Every agreement that has to be printed out, scanned, and stored on paper represents wasted time. Even if you’re sending contracts as email attachments, chasing down signatures can still consume hours of every work week.
The good news is that digital contract management can eliminate many of these bottlenecks. By using pre-approved templates, you’ll be able to draft contracts much more quickly and accurately. By streamlining your approval and signing workflows, you’ll close deals faster and more consistently. And by automating deadline reminders, you’ll catch opportunities to cancel, renew or renegotiate.
Here, we’ll take a closer look at eight simple steps you can take to save time in your contract workflows – and drive measurable improvements in your bottom line. Let’s dive in!
1. Map out contract lifecycles
Without contract governance, a company stands to lose as much as 40 percent of a contract’s value. So start by talking with team members who work with contracts, and map out a contract’s lifecycle from beginning to end. Take note of how you create and manage digital contracts, and how agreements are reviewed and approved internally.
In particular, note the tools and technologies each department uses to work with contracts. For example, your legal team might draft agreements in Word, while salespeople might share them as email attachments. Check whether your company uses e-signature technology, or if signers have to print out agreements, sign them, and scan them. And map out where contracts are stored, whether it’s in filing cabinets, digital drives, or one centralized contract database platform.
Look for inefficiencies in each one of these steps. Any point where team members have to wait for a response from someone else, or manually search through a filing system, is a bottleneck that can be eliminated – saving your organization time and money.
2. Standardize contract templates
Every team that works with contracts can save time and reduce error by working from approved internal templates. When team members download templates they find online, or copy-paste language from unverified websites, they risk creating unenforceable contracts. What’s more, they’re wasting valuable time recreating documents your legal team has already written.
A smarter approach is to have your legal team create a central repository of document templates, which other teams can copy and modify as needed. Templates should be available on a shared drive, or via your company’s contract lifecycle management (CLM) system – but only authorized legal team personnel should be able to modify the originals. You may also want to create a clause library for use in agreements.
Standardization will significantly improve consistency across your contract processes. It’ll also save teams throughout your organization the time and work of creating contracts from scratch, so they can focus on closing deals.
3. Set flexible approval policies
Reviewing and approving contracts often consumes far more time than necessary. Documents may wait in inboxes for days, keeping the next stages of an agreement on pause. Still worse, email attachments can go missing, creating even longer delays while team members try to follow up and get to the source of the bottleneck.
You can expedite approvals in a variety of ways. First, you’ll want to delegate authority, so the approval process can move forward even if one person isn’t available. Second, it’s crucial to set clear guidelines, so everyone on the team knows who to contract in case of a delay. Third, the team should keep a spreadsheet of documents waiting for approval, in order of priority, so it’s easy to see which documents are still waiting to be approved.
If your organization has CLM software, you may even be able to automate entire contract approval workflows, which can save your organization as much as 30 percent on contract processing costs. This can also reduce approval times from days to mere minutes.
4. Negotiate inside contract docs
The contract negotiation stage tends to be another source of delays. As with internal approvals, external negotiations can take weeks of back-and-forth, while teams wait for edited drafts to come back, make their way through the review process, and then revert for the next round of edits. Every revision can require numerous follow-up emails and phone calls, too.
Many of these hangups can be avoided with one simple change: handling negotiations in a live document in real time. Parties can redline their changes, leave comments, and respond to others’ edits, all in a clearly structured way that minimizes confusion. Your CLM software may also offer functionality for negotiating inside a live contract document – which means you can move on to signing without ever leaving the platform.
To streamline the negotiation stage, you may also want to schedule regular check-ins by phone. Combined with real-time redlining and commenting, this consistent communication can dramatically shorten negotiation times.
5. Use legally binding e-signatures
Any step requiring a signature can slow down a contracting process. Printing and hand-signing hardcopies can be a major cause of frustration. Scanned or photographed contracts often come back blurred or incomplete. Even if you know how to sign a Word document, e-signatures in Word docs can be cumbersome to apply – and worse yet, certain types of e-signatures can easily be copy-pasted by identity thieves.
The safest and most efficient solution is to use an online platform that integrates legally binding electronic signature functionality. Many websites allow users to upload and sign a document for free. Still, though, these free e-signatures rarely include any identity verification, which makes their legal validity questionable at best. A more secure approach is to use CLM software that allows users to apply legally binding e-signatures with just a few clicks.
By using integrated e-signatures, you’ll cut down on processing time, and improve the quality of the signing experience. And since most jurisdictions recognize authenticated digital signatures as legally binding, you won’t have to spend extra time verifying their legitimacy.
6. Set automated deadline reminders
Missed deadlines often lead to lost money and time. Aside from hours spent following up on late payments, team members may have to spend days tracking down contracts that auto-renewed without their knowledge, resulting in recurring charges. On the flipside, contracts that self-terminate can require teams to follow up in order to get them reactivated.
To avoid all these hassles, you’ll want to set up a company-wide policy of creating automated deadline reminders. These can take the form of calendar alerts or automated emails. But the most comprehensive solution is to set deadline notifications each time you import a contract into your CLM software. By entering the term and renewal date, you can ensure that designated team members hear about the deadline before it’s too late.
When team members follow contract renewal best practices and know about expirations in advance, they can cancel or renew on time, or even take the opportunity to renegotiate for better terms. In all these cases, notifications will save them countless hours of playing catch-up.
7. Train team members on contract practices
The more consistently your team members follow your contract lifecycle practices, the more time and resources you’ll save. Even if employees are training in their own departments’ contract workflows, a lack of organization-wide awareness can still lead to miscommunications and misplaced documents, resulting in lost productivity.
To make sure all employees support one another in effective contract management, involve key stakeholders throughout your organization in writing a contract playbook. This playbook should include best practices for each stage of the contract lifecycle, along with step-by-step instructions. It’s also worthwhile to schedule classroom sessions, as well as hands-on training and on-the-job instruction. This will give team members opportunities to ask questions, and to put their learning into practice.
Training shouldn’t just be a one-time event, but an ongoing part of your organization’s culture. Review contract tools and tactics with employees on a regular basis, and they can save legal team members as much as 40 percent of their time.
8. Conduct audits and generate reports
All agreements in your company database can serve as valuable sources of business intelligence. Contract management reporting will save you time in the long run, by helping you pinpoint bottlenecks, recurring costs, and other issues that might otherwise cost many hours of labor to fix.
Schedule periodic contract audits to look for inconsistencies, long-term delays, and indications of redundant low-value work. Generate reports to look for trends in contract values over time, as well as timelines from initiation to signing, and from execution to completion. All these trends can give you insight into what’s working, as well as which stages frequently encounter bottlenecks, and where value could be captured more quickly.
No matter how efficiently your contracting processes appear, you’ll always find areas to streamline further when you look closely. Remember to stay in a mindset of continuous improvement, and encourage employee feedback on workflow optimization.
How can contract management save a company time?
Contract management can save your company time via all the following improvements:
Enables quick access to all contracts, preventing time spent searching for documents in various locations.
Reduce the time spent drafting new contracts from scratch by providing ready-made, legally approved formats.
Speed up the contract approval process by automatically routing contracts to relevant parties.
Save time on manually tracking expiry dates and ensures timely renewals without last-minute scrambles.
Digital platforms can track changes, suggestions, and comments, making negotiations clearer and faster.
Accelerate the signing process by allowing stakeholders to sign digitally, eliminating the need for physical paperwork.
The more steps of each contract’s lifecycle you bring into a consistent workflow, the more time and resources your organization will save. If you’re looking for a good place to start, choose just one of the areas above, and focus on modernizing that aspect of your contract pipeline – then build outward from there. You’ll soon see the time savings begin to multiply.