Contracts are crucial for businesses, governing about 70% to 80% of their activities. Whether between companies or within a company, contracts ensure that agreements and responsibilities are clearly defined. Many businesses still use manual methods to handle contracts, but these processes are often slow and full of potential errors. This old-fashioned approach can create a lot of inefficiencies, causing companies to miss deadlines and even face compliance issues. Poor contract management costs companies up to 9% of their annual revenue. On top of that, it can take over three weeks just to get a contract approved, which can slow down important deals and operations.
Businesses are increasingly turning to contract management software to streamline these processes and avoid the pitfalls of manual contract management. Businesses can greatly lower risks and boost compliance by automating workflows, keeping track of contract milestones, and offering real-time visibility. Studies show that automation in contract management can save up to 82% of time spent on contract approvals, drastically enhancing operational efficiency. In this blog post, we’ll explore contract management software's key benefits and features and how it can transform your business operations, from reducing errors to speeding up contract cycles.
Why do Businesses Need Contract Management Software?
In today’s business world, rules and regulations are always shifting, which is why having contract automation is so important. It helps companies keep up with these changes and manage their contracts more efficiently. Utilizing manual or outdated systems, there are common challenges, such as;
- Prone to errors
- Can lead to delays and missed opportunities
- Struggles with approval
- Fragmented and loss of data
- Missing contract renewals
- Financial loss
- Legal risks
A contract management solution is a digital tool designed to automate and streamline the entire lifecycle of a contract, such as drafting, negotiation, execution, storage, and renewal. It centralizes contract data, automates workflows, and ensures that important deadlines are met without manual intervention.
The contract management software market is set to see major growth, jumping from $1.72 billion in 2023 to $5.10 billion by 2032, with a projected annual growth rate of 12.85%. This drastic increase is due to companies looking for ways to simplify contract handling. There is more than one reason why more companies are adopting this software.
According to Weshare, automating contract management can speed up negotiations by 50% and cut down inaccurate payments by 75% to 90%, reducing financial risks significantly.
Contracts play a vital role in business operations, influencing approximately 70% to 80% of activities. Contract management software streamlines contract creation and oversight, ensuring compliance and reducing the risk of disputes.
It takes an average of 3.4 weeks just to get a contract approved, and that’s only part of the process. This is why automation and contract management tools have become so popular—they save time and reduce hassle.
Mismanaging contracts can be costly, with companies with over 1,000 employees spending $2.5 to $3.5 million to recover lost documents. The software prevents lost documents by centralizing storage and providing easy access and tracking features.
Contract management can be tedious and require a lot of time. Automated contract management has saved lawyers an impressive 82% of their time, allowing them to focus on more critical tasks and boost overall productivity.
Key Features of Contract Management Software:
The features of contract management solutions play a crucial role in determining their effectiveness for businesses. Dynamics 365 contract management software is one of the leading options available in the market. Some of its key features include;
- Contract Order Management: Track contract execution, manage flexible payment terms, and monitor contractor work progress all within one integrated solution.
- Budget Control: Allocate resources and revise budgets as needed with seamless integration into your project management and accounting systems.
- Submittals and Deliverables Management: Manage submittals and deliverables, controlling payments based on status and collaborating effectively with stakeholders.
- RFI Tracking: Enhance quality standards by recording inspections, managing feedback, and ensuring every project detail meets your high expectations.
- Work Completion Tracking: Track work completion accurately by updating progress percentages and ensuring invoices align with agreed-upon terms.
- Dispute Tracking: Handle disputes by tracking and managing issues related to work quality, performance, payments, and other issues for efficient resolution.
- Contract Invoicing: Manage contract invoicing by validating invoices against payment terms and deliverables to ensure compliance and accuracy.
How Does Your Business Benefit from Contract Management Software?
There are many contract management solutions available in the market, but the contract management software which is built on Microsoft Dynamics 365, improves how your business manages agreements, turning tedious tasks into streamlined processes. Let’s find out how it benefits your business;
Increased Efficiency: Automating routine tasks like contract creation, approvals, and renewals significantly reduces time spent on manual processes.
Improved Collaboration: Real-time collaboration tools make it easy for everyone involved to communicate smoothly. When all stakeholders can access and edit contracts at the same time, it reduces delays and misunderstandings.
Centralized Management: The contract management software on Dynamics provides a single platform for organizing, storing, and retrieving contracts, improving accessibility and security.
Effective Risk Management: By watching deadlines and spotting old clauses, businesses can avoid compliance issues and reduce legal risks. This smart approach helps protect the company from expensive disputes and penalties.
Cost Saving: By reducing delays, errors, and administrative burdens, Dynamics 365 contract management software helps companies save on operational costs.
Data-Driven Insights: Advanced reporting tools offer real-time analytics and insights into contract performance, helping businesses make informed decisions.
Faster Approval Cycles: Automated workflows speed up contract approvals, allowing businesses to finalize agreements quicker and capitalize on opportunities.
Transparency and Visibility: With real-time tracking and analytics, you can easily see the status of contracts, deadlines, and overall performance. This helps organizations make smart decisions and quickly tackle any problems.
Enhanced Security: Contract management software ensures sensitive data is protected with features like encryption, role-based access, and audit trails.