Is contract management software important to compliance? Yes! Complex regulatory environments make it difficult to quickly comply with regulatory and legal requirements during contract formation & negotiation. Regulation is where organizations struggle because striking the balance between accuracy and speed is challenging but crucial.
Contract management software makes meeting the organizations’ legal aspects easier and quicker for every type of organization.
Let’s get into the details to understand not just why you need contract management software, but also why it is so essential to compliance.
Some people believe that having large and overlapping legal and business teams create contracts ensures regulatory demands get met.
In reality, this results in fragmented management and contractual obligations falling through cracks. The absence of a central contract repository further makes it difficult to search contracts by parties, clauses, or dates. Also, at times the contractual obligations depend on the people, which are not stored on any system. These situations can easily escalate into instances of non-compliance.
With contract management software, these gaps can be easily fulfilled.
By creating a dynamic workflow, DealHub contract management software allows you to scan all the documents and get a complete overview of your company’s current state of affairs and completely automate contract generation. You can run parallel automated workflows to minimize admin work and speed up the review process.
All teams and stakeholders involved in the contract are kept on the same page — ensuring nothing slips through that can cause a legal headache.
Streamlined Manual Processes
This goes without saying that manual processes are tedious and prone to errors. In today’s fast-paced time, organizations cannot afford to delay the processes, and errors are off the limits. For contract management, these two are the biggest risks involved and can deeply impact organizations. In addition to the inability to effectively monitor contract risks that may lead to lost opportunities, non-compliance, and penalties, the manual contract processes depend upon individuals’ knowledge, who may leave a company anytime, leaving the contract formation process and management hanging from the cliff.
That’s not all; manual reporting takes away the staff’s time that can be utilized to make sure that the contract is fulfilling the regulatory and legal terms and conditions.
Contract management software plays a crucial role in streamlining manual processes, thus saving companies from losing opportunities and non-compliance factors by empowering the teams with quick, swift, and automated solutions.
Redlining and Version Control
The use of emails to collaborate on contracts poses a serious risk leading to version control nightmares at times. The existence of multiple copies of a single contract running in a series of email inboxes and sent-folders can make way for errors. Missing a change or overlooking a clause could prove costly because of extra work generated, funds misappropriated, and may lead to legal actions.
However, DealRoom contract management allows organizations to redline contracts from a single source of truth, in real-time. That way, there is always a single master document that reflects the accurate state of the contract after taking account of all edits made by all stakeholders.
This eliminates the chaos created by having multiple versions, across multiple computers, that need to be reconciled before closing the deal. By extension, there is no risk of a misunderstanding, or a change not getting put into the final draft, that can cause compliance issues later on.
Standardized Contract Language
The term “boilerplate” or standardized language in a contract typically comes at the end of the agreement (it may be under sections titled “miscellaneous” or “general terms”). However, these are normal provisions on a contract that are critical, and should always be verified carefully and tailored to address the significant issues that will determine the parties’ rights concerning the business contract.
Rules on how the agreement will be interpreted or what law will govern the contract’s subject matter or what happens to the agreement clauses are found to be invalid/fraud, and other such conditions make the part of standardized contract language.
As it is one of the most crucial segments of the contract, drafting its points requires additional attention and knowledge. Manually, this may take more than expected, and there is the possibility of leaving out the conditions that may be important to mention in the contract.
DealRoom contract management easily adds approved boilerplate language into your contracts, ensuring continuity of terms for every deal in your pipeline.
Automatic Subscription Contract Renewals
Missed subscription contract renewals can leave companies with significant financial and legal problems. They may lead to the expiration of MSAs, which can hamper the organization’s revenue. However, it gets bypassed most often, leading to liabilities.
When it comes to compliance, contract renewal is one of the simplest tasks to achieve.
DealRoom automatically executes subscription contract renewals, so you eliminate the risk of failing to deliver on the terms of the agreement.
Contract Management Software Helps Mitigate Risks
DealHub CPQ + DealRoom, contract management software has become a necessity for businesses all over the world. It ensures accuracy without sacrificing speed and makes contract management processes a part of a revenue-generating pipeline.
Automating the critical functions required by enterprises to enter a contract also mitigates the risks involved. Organizations thus can boost their efficiency, productivity, and revenue, simply by having contract management software within their workforce.