Updated: May 5, 2022
As technology advances rapidly, many industries use automation to streamline their work processes. Contract lifecycle management is one such work process that needs great attention to detail, patience, and discipline, taking a lot of time and causing inefficiencies if done manually.
That’s why businesses and legal professionals turn to contract automation to accelerate contract reviews, negotiations, approvals, and executions. It doesn’t matter if you are dealing with fewer contracts or more. Contract automation saves time, reduces risks, and increases revenue.
The International Association for Contract & Commercial Management (IACCM) shares that contract automation can improve contract function and process efficiency, outcomes, and visibility.
What is Contract Automation?
Contract automation is creating, reviewing, managing, and storing contracts digitally to accelerate the contract processes.
Legal and even non-legal professionals such as sales reps can self-serve business contracts with contract automation platforms.
Since contracts are crucial for every company, a platform that can simplify and secure the contract lifecycle is beneficial.
Why Should you Automate Contracts?
Contracts are the lifeblood of every organization. It involves participation from multiple teams from sales, HR, finance, accounts, legal, and IT to external vendors. Even small businesses and startups must deal with numerous contacts daily, such as NDA’s, employment contracts, partnership agreements, licensing agreements, etc. The involvement of several teams requires smooth collaboration. Manual contract management requires a lot of back and forth from one team to another, which takes up a lot of time. Additionally, human errors increase financial and reputational risks. Even poor storage of manual contracts can lead to infringement.
All-in-all, World Commerce & Contracting estimates that inefficient contract processes cause businesses to lose 9.2% in revenue. According to Aberdeen Group, contract automation can reduce the sales cycle by 24%. So by implementing a contract automation platform, you can do more work in less time and focus on growing your business in 2022.
Here are some key benefits of contract automation:
Benefits of Contract Automation
1. Rapid Revenue Growth
Manual contract processes lead to delays in the sales cycle, leading to delayed revenue. Businesses can save time, fast-track contract processing from weeks to days, and generate revenue rapidly by automating contract workflows digitally.
Complex contracts can cause long delays and even lead to the abandonment of deals because of inefficiencies. A contract automation platform makes it easier and faster to initiate contracts, collaborate with multiple parties, negotiate, and agree on terms, and execute contracts.
Contract automation reduces the workload on legal teams, and sales teams can concentrate more on generating revenue.
2. Better Compliance
According to Globalscape’s survey of ‘True cost of Compliance”, the average annual cost of compliance was around $5.5 million. In contrast, the average cost of non-compliance was almost three times higher, at $14.8 million. Companies that fall out of compliance risk experiencing delays, fines, cancellations, and reputational damage. As a legally binding agreement, contracts must comply with all the regulatory requirements and new policies and changes that apply at the time of contract renewals.
Contract automation helps create contracts that include all the standard clauses and allows tailoring contract templates to specific regulations. With a contract automation platform, you can save expensive legal time and prevent compliance mistakes.
3. Enhanced Security
Businesses consult and collaborate with various parties, from employees and staff working remotely to external vendors, leading to data leaks and breaches. By aggregating contracts in a centralized repository, you can improve your organization’s sensitive information.
Automated contract workflow platforms securely store all your contracts in the cloud. You can also limit who has access to the contract, editing, and sharing rights to conduct your business without any fear of data leakage.
4. Complete Transparency
A common problem with manual contract management is finding the misplaced version of the contract. Contracts are usually dispersed over multiple emails, collaboration platforms, office space, and hard drives. Automated contract workflow platforms provide complete visibility into the process and save all the versions of the same contract in the cloud.
You can track who last edited the contracts, what changes were made, and who all approved the changes. With an automated contract workflow platform, you can easily take control of the contract lifecycle without rummaging through various files, applications, and different teams.
5. Improved Customer Service
With almost everything being digitized globally, nobody wants to manually go over the contract, then print it, sign it, scan it, and email it back. Also, going through a long list of emails trying to find the final version of the contract is cumbersome and adds to a negative customer experience.
With a contract automation platform, you can improve your customer service. Your customers get complete transparency towards the contract processes and can easily collaborate, negotiate, and execute contracts in a single space. A Salesforce report shows that 80% of customers place the same value on the experience as they do on products and services. A positive customer experience is more likely to coincide with future purchase considerations. Hence, positive customer service will pay huge dividends during renewals and up-selling.
Contract automation helps organizations automate their processes, streamline complicated workflows, and boost productivity. It benefits both the legal and non-legal teams greatly. Small startups and organizations can self-serve contracts with contract automation so that legal teams can do more high-value work.
Find out how you can automate contract workflows with InkPaper here: https://www.inkpaper.ai/post/learn-how-a-contract-workflow-platform-can-benefit-your-business