Contract automation refers to the process of streamlining admin tasks, reducing business overhead, and providing an overview of all contracts. The technology-assisted process enables legal and non-legal teams of an organization to use software to draft and review contracts while saving the time of conducting the task manually and reducing errors and discrepancies.
Contract automation involves managing, generating, and storing official contracts on a digital platform to create an efficient workflow within an organization. The process is important for managing business relationships and using software can automate and simplify contract management processes to save time and money.
Why is Contract Automation Important?
Every business sees a significant volume of routine contracts because of the fast-growing relationships with clients, stakeholders, employees, and customers. In many cases, the contract process may be bottlenecked due to not having a dedicated team to handle such documents. That is why it is necessary to use software to automate contracts without manual tasks and activities.
The legal, sales, HR, operations, finance, and procurement teams typically deal with the most contracts within an organization. All teams have different functions to perform daily that may take them away from working on contract drafts and reviews. In such cases, contract automation can help make sure legal documents are reviewed and managed quickly.
What are the Benefits of Contract Automation?
Contract automation helps optimize content creation, execution, and management of contracts through efficient digitization and collaboration. Here is a list of the benefits of the contract automation process.
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Improved Efficiency
Contract automation involves the use of pre-approved templates that helps the teams to draft documents faster. The members can follow up automatically after the draft is ready and recommend changes in amendments, data input, or negotiations at their convenience.
Moreover, clients do not need to remain physically present to execute the contract because the automation software should provide eSignature options.
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Saved Expenses
The average labor cost of a contract ranges from around $6,900 to $49,000, depending on its complexities and content. Contract automation helps organizations sign contracts faster without the additional expenses of reviewing and managing them manually.
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Enhanced Work Value
Contract automation enables team members to spend less time juggling within the organization for follow-ups. It allows every department to focus on its core functions. The right contract automation process eliminates contract renewal delays, enables simple signing processes, and automates the follow-up system.
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Controlled Access
Contract automation systems should involve 24×7 document tracking processes to ensure complete visibility. The systems also enable complete control of the teams over the documentation process. It allows team members to instantly deal with lost documents and correct errors.
What is the Process of Automating Contracts?
Legal and non-legal business teams can create automated workflows to enable other team members to generate specific contracts without legal assistance. Now, the question is – how to automate contracts?
Here is a list of ways in which team members can start contract automation.
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Create Templates
The teams can seek help from contract templates to create attractive and dynamic documents that can help with engaging branding for business organizations. The templates enable the creation of error-free contracts that help build strong commercial relationships without communication gaps between teams.
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Self-Serve Contracts
Teams involved in the use of contracts can create and send them instantly through contract automation software. The software includes customized order forms and partnership agreements, making it easier for the teams to draft the contracts within the stipulated time.
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Centralize a Database
Team members can keep a centralized database for contracts to save time and make the documents accessible to external partners, internal team members, clients, and stakeholders. It allows everyone to find relevant contracts in the database and review and edit them at their convenience.
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Create an Approval Workflow
The teams can keep an automatic approval workflow to standardize and simplify the contract lifecycle process within the organization. The team members can use this process to spend less time on paperwork and working on other priority tasks.
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Automate the Signing Process
Automating the signing process in contracts involves eSignatures, available in contract automation software. Team members can take advantage of the feature to electronically produce signatures and ensure legalities as it is from their written counterparts.
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Enable Contract Reporting
Team members must perform contract reporting to display an overview of what is happening with all the organizational contracts. It helps the concerned individuals to act immediately if a contract is left unattended or contains errors.
What are the Features to Look for in a Contract Automation Tool or Software?
A contract automation software or tool must supplement the everyday workflow of a business with multiple automated processes. It helps minimize the workload instead of imposing the entire burden on the team to reconfigure existing processes. That is why the software or tool needs to have the following features.
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Dynamic and Customizable Contract Templates
The software should have dynamic contract templates to create pre-approved documents and legal clauses for teams to generate self-serving contracts. The software must also identify changes in the key details of contracts and suggest reviews to maintain compliance.
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Contract Editor
The software should include a full-featured word processor to modify and edit legal documents digitally without compromising the experience. The contract editor should also include features that help draft error-free contracts without discrepancies.
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Contract Collaboration
The software should allow users and counterparties to make changes to a document simultaneously. It should also include an autosave feature to ensure all changes are documented efficiently for the teams and saved in a single version.
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Audit Trail
Contract automation software should have an audit trail feature to display a unified flow of all track changes made to a document by different users. Changes should include the time and date stamps to keep track of contract versions.
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API Integrations
The software should also have API integrations available that enable team members across business organizations to plug into the software and take ownership, share knowledge, and operate independently.
Conclusion
Contract automation leverages technology to help build workflows and automate steps in creating contracts to minimize resource and time consumption. The process also helps accelerate the turnaround times and reduce dependencies on a legal team for drafting, reviewing, and modifying contracts.
The best part about contract automation is that it is useful for legal and non-legal teams working in a business organization. The process helps the teams produce or work on a contract without manual errors.
Contract automation software can help the legal, sales, procurement, finance, HR, and business operations teams to draft self-serving contracts using customizable templates, automated workflows, API integrations, etc.
If you are interested in making it easy to search through your contracts, LawInsider’s contract repository makes it easy for you to upload your documents and find the hidden contracts among them. From 100 to 100,000 contracts, there are no limits and no hidden fees for the amount of documents that you can organize. With secure access and encryption for all files, you can be sure that your contracts stay safe and private.
References:
- https://blog.iaccm.com/commitment-matters-tim-cummins-blog/the-cost-of-a-contract
- https://www.spotdraft.com/what-is-contract-automation
- https://docucollab.com/how-contract-automation-is-changing-the-business-world/
- https://www.sirionlabs.com/blog/contract-automation/
- https://research.aimultiple.com/contract-automation/
Tags: Contract, Contract Automation, Automation