Tips to Improve Contract Management and Close More Deals
Contracts dictate everything in a business, from strategies to relationships, making them a central source to business success. The success rate of business goals directly depends on the effectiveness of agreements, meaning it’s imperative to improve their management.
What Are The Signs That You Need To Improve Your Contract Management?
Misplaced or Inaccessible Contracts
When your company deals with upwards of a hundred deals daily, manual management is no longer feasible. Manual management can exponentially increase your contract cycle because instead of spending time working towards a deal closure, you waste time searching through files, emails, and documents for your misplaced business arrangements.
Decrease in Revenue
If you notice that your company has been taking a hit on its earnings, it may be because of contract mismanagement. If your agreements are not well managed, you may miss important deadlines, auto-renew deals that you intended to cancel, and miss opportunities to negotiate better terms.
Slow Deal Closing
Has your company’s contract cycle length increased over time, leading to prolonged deal closure? Slow deal closing can be because of many reasons, including stalled negotiations, inability to keep up with the volume of arrangements, or bottlenecks at certain stages in the cycle.
Stalling during one phase of the process creates domino effects. Missing the deadline on one step can cause the rest of the deal’s deadlines to be pushed back, significantly lengthening the cycle or in the worst case it becomes a voidable contract, as companies start loosing trust.
What Positive Consequences Can Development In The Context Of Contract Management Have?
Structured agreement management can decrease financial losses, improve business operations, and create positive relationships with business partners. By organizing and speeding up the contract cycle, deal closure will be more successful, allowing for tremendous business growth.
Why Shouldn’t Companies Underestimate the Significance of Their Contract Management Process?
Contract Mismanagement Wastes Time and Effort
Proper contract management is vital to any successful business that closes deals daily. A lack of organization and lengthened contract cycles will decrease your overall productivity levels.
A Good Relationship With Contract Partners is Beneficial to Both Businesses
Streamlined contract management shows the other stakeholders that you are proactive and reliable. If you don’t miss deadlines, limit erroneous proposals, and make the negotiation process easy for your partners, the rate of successful deal closures will increase.
Saves money
Mismanaging Contracts Can Limit Profits
To maximize your revenue, you should limit the fees accumulated from not handling agreements proficiently. Fees from missed deadlines, accidentally auto-renewed agreements, employee pay for the contract cycle, and possible lawsuits put a large dent in the company earning potential.
Seven Ways to Skyrocket Contract Management
Review Current Management Process And Define Weaknesses
There’s always room for improvement in company processes. Take a look at the way your company currently manages business agreements and see what areas can be improved. You can do this by looking at a time chart and seeing what stages of the contract cycle take the longest and then finding a management process to make those stages more efficient.
Set the Right Goals
Goals are crucial when you’re working to improve your business. However, goals must be realistic and attainable; otherwise, they will only be discouraging. Setting goals for management will give you a concrete point to work towards, which is significantly more motivational than just looking to “improve your contract management.”
Use Templates
Formatting and typing out business deals is incredibly time-consuming, which leads to a long contract cycle however, there’s an easy solution for this. Templates allow you to format with the click of a button rather than typing everything out manually. You can even make specific templates for recurring contracts where you only have to change a few items.
Convert to Easily Text-searchable Digital Files
Manually searching for contracts decreases your efficiency, especially if they are poorly managed and unorganized. If you give all of your agreement documents appropriate file names, they can easily be looked up on your desktop. Making them searchable will improve your contract cycle length and eliminate the risk of sending the wrong arrangement or a previous version to a partner.
Establish a Repository
To take your organization a step further, consider establishing a single repository for your agreements. A contract repository will consolidate all of your business agreements to a single platform, meaning you no longer have to search through emails and folders to find the files you need.
Use Electronic Signatures
Manual signing can take an excessive amount of time and effort to coordinate. E-signatures allow for approval right away and are much more convenient than manual signing. You can send the contract for approval virtually as soon as it’s ready, limiting unnecessary waiting periods.
Use Contract Automation Software
The most efficient way to skyrocket your contract management is by using automation software. Automation software will complete most of the above processes for you, creating a maximized management process. Rather than being responsible for the entire process, allow technology to do the job for you, allowing you to dedicate more time to important tasks such as negotiations. Learn more about the use of contract automation software here.
How Do These Steps Improve Contract Management and Performance?
All of these steps are beneficial to speeding up deal closures and reducing mistakes made while creating contracts. Management revision and setting goals will give you exact steps to take to reach your target. Without goals, there is no official objective to work towards, which will limit your ability to improve your management and performance.
If you follow these tips your company’s deal closure performance will be better than ever. Improved management allows for business deals to be closed faster, efficient use of time, improved revenue, and simple agreement creation.
Final Thoughts
Contracts are official agreements between you and your business partners, and proper management of them is vital for business success. Improved management can significantly improve your business’s overall productivity.
About the Author
Bibhuranjan Editorial Officer, technofaq.org I'm an avid tech enthusiast at heart. I like to mug up on new and exciting developments on science and tech and have a deep love for PC gaming. Other hobbies include writing blog posts, music and DIY projects.
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