Manual contract creation, review, and approval often results in missed commitments, compliance mandates, possible discounts, and other milestones. This puts the business at risk.
The contract management process changes for the better when buy-side, sell-side, and corporate contracts and workflows are aligned. Contract lifecycle management (CLM) addresses the critical issues that come up during the typical lifecycle of a contract.
In this blog post, we’ll examine how enterprise contract management software, such as the Icertis Contract Management (ICM) platform, can improve the integrity of a contract at every stage.
When contract templates are scattered throughout an organization, inconsistency and risk are allowed to thrive. Standard templates can quickly change, slowing down business processes as teams look for the latest version of a template or try to recreate them as best they can.
Enterprise contract management allows all contract templates to be stored in and accessed from one location. Users can easily update them, and all templates come pre-populated with known data. All this results in greater consistency, reduced risk, and faster execution.
Creating contracts from scratch is time-consuming and introduces risk. It slows down the entire contracting process because of a wide disparity in formats, terms, and languages.
ICM integrates seamlessly with Microsoft Word and features a clause library with pre-approved terms and language. This enhances compliance by making the contract creation process faster, easier, and more consistent.
Contract Review and Approval
Sending contracts for review via email often leads to version control issues. This practice is especially problematic during contractual disputes and audits.
The Icertis platform tracks the entire review chain with time stamps that record all approvals, changes, and rejections. If there is ever a question about a contract, it is easy to track exactly those “what, when, and by whom” issues.
When contracts pass through multiple hands while in various stages of review and approval, it can be difficult to determine exactly where a particular contract is in the approval process, and when it might be executed and where the final version lives. This often leads to confusion, uncertainty, and missed revenue recognition.
An enterprise-wide platform like ICM allows everyone to see the status of a contract—draft, pending approval, approved, and executed. Since everyone is working with the same document, version control problems and deviation from an approved or executed contract become non-issues.
When contracts are manually managed they are often forgotten as soon as they are executed, running the risk that commitments, potential discounts, and other milestones will be overlooked. Consequences of this range from missed opportunities to generate revenue and save money to fines and litigation due to noncompliance or breach of contract.
ICM automates contract lifecycle management and integrates with CRM and ERP systems to trigger additional activities. Specific line items can be tracked, alerts signal commitments and milestones, and routine business processes are accelerated.
Contract Expiry and Renewal
Manual contract management can easily result in unwanted expiries and renewals, since an organization has no effective means of tracking contracts throughout their full lifecycle. Automatic renewals and unexpected expiries cause countless companies to lose revenue unnecessarily.
ICM allows users to produce customized alerts of important dates, providing visibility into upcoming expiries and renewals. As a result, contracts never expire or renew unintentionally.
To learn more about ICM and how it can benefit your organization, download the whitepaper: Value Creation in Enterprise Contract Life Cycle Management.