1. Streamlining the process
Efficiency is improved by using legally approved standardized contracts. Time consumption is also reduced greatly. Streamlining the contract management process helps in finding even small deviations easily and this can avoid huge risks.
2. Increased visibility
Every contract has its own due date. Contract Management solutions provide automated notifications so that it can be renewed easily. Notifications can be set for appropriate parties so that all the parties are aware of important dates.
3. Reducing Risk
Contracts, by nature, involve huge risk. Contract Management helps define a framework where parties can collaborate together to achieve an outcome that reduces risk on all sides. Contracts bind both parties. Contract Management provides vendors performance management against contracts, allowing organizations to effectively check on how vendors are performing and take appropriate action when needed.
4. Cost Savings
A proper Contract Management Solution help to achieve cost savings by reducing manual effort. Improving visibility and automating notifications for contracts reduces the time needed to find the correct information at the correct time. A CLM tool helps maintain compliance with contract items and services, thereby reducing costly mistakes.
An example: Manufacturing companies often contract with companies who supply raw materials for their production process. These contracts restrict the supplies from increasing the materials costs for the mentioned period of time.
5. Business Relationships
Companies use contracts to create long lasting business relationships. These relationships allow companies to develop revenue streams by consistently purchasing goods or services from a company which will benefit both the parties. These relationships can also be used to find new partners for producing goods and services.
6. Heightened Security
Paper contracts must be secured by locks and keys properly, as the risk involved in losing the contracts are high. Contract Management tools store the contracts in the cloud, which is highly secured. Documents stored in the cloud cannot be accessed by anyone to whom you do not grant access. Contract Management Solutions allow only authorized people within an organization to have visibility into contracts, providing greater security.
Documents signed with a digital signature cannot be altered without both an alert and a stamp of invalidation being applied to the contract itself. Forgeries are difficult to produce with such high levels of security.
Interested in knowing more about the benefits of a contract management solution? Register now!