5 Benefits of Efficient Contract Workflow Management

Legal teams are inundated with contract requests. Sales teams face delays in closing deals and procurement teams grapple with disorganized legal documents.   

The lack of a streamlined process can cause critical bottlenecks in the contract lifecycle, leading to: 

1. Missed opportunities 

2. Compliance issues  

3. Financial risks &

4. Spend leakages 

With an average of 20k contracts under management, navigating them through every stage of the contract lifecycle can be a daunting task for enterprises. 

Business functions and legal teams require a comprehensive and agile contract management approach to foster healthy customer and vendor relationships.  

An efficient contract workflow management strategy can unlock several benefits such as reduced risks, better compliance, faster contract execution, and more.  

Let us dig deep into how mapping out a concrete workflow impacts every stage of the contract lifecycle and explore its potential benefits.  

But first, let’s understand what contract workflow essentially is.  

What is contract workflow?  

The contract workflow process involves the navigation of contracts across the lifecycle, right from contract request to contract renewal.  

The workflow involves the participation of key stakeholders in Sales, Legal, Procurement, Finance, IT, and third parties to author, review, negotiate, and execute contracts without conflicts. In the current scenario, there is too much dependency on legal teams to get contracts across every stage.  

A contract lifecycle management (CLM) software streamlines the entire contract lifecycle by automating contract-related administrative tasks, reduces risks, and warrants compliance.  

Here’s how CLM software can enhance contract workflows at each stage of the contract lifecycle. These stages include:  

1. Contract Request 

The contract request stage involves gathering essential information such as:   

- Purpose and scope of the contract   

- Key parties involved   

- Terms and conditions   

- Any specific requirements or obligations 

With an efficient contract management workflow, stakeholders can leverage customizable request forms and raise contract requests in the CLM platform.  

2. Contract Authoring 

The contract authoring stage involves penning down the terms, conditions, rights, and obligations based on the request.   

Robust CLM software allows Sales and Procurement teams to author contracts with minimal dependencies on the Legal teams.  

Efficient contract workflow management strategies include leveraging the numerous templates and clause libraries in the CLM platform while drafting contracts to ensure compliance.  

However, it’s always a good practice to get the legal documents vetted by the Legal teams before signing on the dotted line.  

3. Contract Review & Negotiation 

There are high chances for a contract draft to go through countless revisions and amendments at this stage or even at a later point. A robust contract workflow management involves redlining and documenting all the changes and versions of a contract.  

This helps business functions and legal teams track all the amendments made to a contract and process the latest draft for further approvals.  

4. Contract Execution 

After multiple iterations and amendments, the contract is ready to be signed on the dotted line.  

However, many businesses still follow the old-school method of managing hard copies of contracts and using wet ink for signatures.  

There is also a strong possibility of misplacing contracts.  

This is where modern businesses leverage eSignature platforms to digitally sign contracts and store them in a central repository for future use.  

5. Contract Performance 

Once the contract is signed, both parties fulfill their obligations and address any changes or challenges.  

Efficient contract workflow management involves creating alerts and notifications to track key dates, milestones, and other commitments. This ensures the parties are proactively notified of upcoming requirements such as deliverables and autorenewals.  

6. Audits and Renewals 

The contract lifecycle is still not over. Businesses must always perform regular audits to ensure their contracts remain compliant with internal and external regulations.  

A contract lifecycle management platform keeps track of renewal dates to revise existing contracts for more favorable terms or unlock opportunities for new agreements in the best interest of the business and avoid potential revenue loss.  

How to Ensure Efficient Contract Workflows?  

An end-to-end contract lifecycle management software can automate the contract workflow to ensure seamless contracting.  

Businesses can automate both Sales and Procurement contract lifecycles without duplicating their processes.  

Here are a few effective ways to ensure seamless contract workflow management:  

Identify the Stakeholders & Define Responsibilities 

Before chalking out a concrete contract workflow, businesses must ensure they involve all the stakeholders required to execute a contract. Every stakeholder must have a clearly defined role in the contract lifecycle.  

Here are some of the important questions businesses need to answer while initiating a contract:  

Who is responsible for creating contract templates or a comprehensive playbook? The Legal team.  

Who drafts the contracts? Sales and Procurement teams.  

Who approves the contracts? This is subjective. Usually, it’s either Sales, Procurement, or Legal depending on the type of contract.  

Who negotiates the contracts? Sales and Procurement.  

Who signs the contracts? C-suite or Legal teams.  

Create an Approval Workflow 

Creating a robust approval process is the best way to improve contract workflow management as stakeholders get visibility on the status of the contract.  

An AI-powered contract lifecycle management software can create customizable approval workflows depending on the requirements.  

Here is an example of an efficient workflow process: 

- A contract is created by a Sales or Procurement professional 

- Legal team reviews the contract and either approves or rejects it 

- If it’s a high-value contract, the Finance team approves or rejects it 

- Contract is signed after all stakeholders reach a consensus 

Benefits of Automating Contract Management Workflows 

Automating contract workflows can bring multifold benefits to businesses of all sizes. Here are five key advantages of implementing contract automation: 

Reduced Risk: Automating contract workflows helps minimize the potential for human errors and oversights that can lead to costly legal disputes or non-compliance issues.  

Faster Time to Market: Automated contract authoring based on predefined templates and clauses enables quick drafting, while streamlined approval workflows accelerate the review process. This allows businesses to seize opportunities and bring products and services to the market more swiftly.  

Increased Compliance: Automated workflows can also help organizations keep track of changing regulations, ensuring that contracts remain up-to-date and in line with the latest legal requirements. By mitigating compliance risks, businesses can protect their reputation, avoid penalties, and foster better relationships with stakeholders. 

Improved Productivity: Contract automation reduces the manual workload involved in contract management. Employees can focus on more strategic and value-added activities.  

Automate Your Contract Workflow Today! 

From contract request to renewal, SimpliContract can automate the entire contract lifecycle and ensure seamless contract workflow management.  

Our platform benefits both buy-side and sell-side contracts and can integrate with your existing enterprise applications.  

Automate the entire contract lifecycle with SimpliContract CLM platform.