CLM is simply the management of any type of contract from the initial stages to expiration or renewal. From commercial agreements to service contracts, all businesses and organizations rely on contracts as a key component of their business. No matter what the specialty of your business is, you probably enter several contracts every day. These contracts could bind suppliers and purchases or create legal bonds. The greater the number of active contacts you have, the more revenue you generate.
By optimizing the processes involved in contract management and adopting CLM, you have control over every stage of the contracting process, from risk assessment, through onboarding to contract renewal and termination, which in turn improves contract performance and value.
Let's take a look at the 6 best practices for CLM
1. Seamless Collaboration
Contract management is teamwork. Cloud-based solutions that allow parties to collaborate and negotiate contracts in real-time are another great way to minimize risk and increase efficiency. Choose solutions that enable all parties to concurrently review, approve, and mark up contracts securely, on their own devices. This approach has the added benefit of providing an audit trail of the entire collaboration process which makes managing contract creation easy and accurate.
2. Ability to create template libraries
Drafting contracts is a difficult process. Creating shared and legally-approved clauses and template libraries is key to increasing the productivity and compliance of any contract process. It allows organizations to leverage pre-approved language, which helps assemble “negotiation-ready” contracts faster while eliminating deviations and errors from standard legal language.
3. Streamline Approvals with Electronic Signatures
Securing contract approvals is usually one of the slowest parts of contract management. That’s why a key part of any digital contract transformation is digitizing the approval process. E-signatures help to get documents signed electronically from any device anywhere in the world in minutes. Another advantage is increased security because e-signatures carry a digital record about who, when, and where a document was signed.
4. Assign various levels of access to the right team members and ensure security
CLM ensures that people in your organization have appropriate access to contracts and parts of the process. A contract management software allows you to set role-based and feature-based permissions for enhanced contract security and compliance. It prevents unauthorized users from seeing or editing specific contract details and gives you an overview of who made what changes in the specific contract.
5. Create Dashboards to get a complete overview of contract stages
Dashboards help to track completed, ongoing and sent contracts which helps improve productivity so you can refine and optimize your process. The legal team, managers, and executives access information-rich dashboards that help drive sound decisions. Dashboards can help you understand contract performance so you can provide targeted legal advice based on data.
6. Contracts repository
A central electronic repository specifically built for contracts makes it easy to track, search, manage, and secure data. Usually, organizations store contracts in shared folders across multiple locations and formats, which is risky and inefficient. It makes it hard to gather information in and across your contracts. Centralizing your agreements in a digital contract repository eliminates these issues and is one of the top CLM best practices. It keeps agreements organized, gives you the ability to easily search and report on contract data, and also greatly reduces the risk of contracts being lost, overlooked, and accessed by the wrong individuals.
Without an effective contract management strategy and solution, it would be difficult for any business of any size to be successful. Poorly managed contracts can lead to negative consequences for your business, in terms of reputation and financial performance. Given the importance of contracts for any business, it would be advantageous to invest in effective contract lifecycle management and gain control of end-to-end processes. Scribe Zero’s CLM is an easy-to-use platform with a number of features that make contract management an easy task.
