Picture this. Poor contract management could cost your business’ overall sales. As WCC stated in its report earlier, poor contract management has continued to cost companies 9% of their bottom line.
Whether you run a small startup or a large enterprise, contracts are the lifeblood of your business functioning. From defining obligations, drafts, and negotiations to maintaining fruitful relationships with customers, suppliers, and partners—contract management plays a pivotal role.
With the tools available today, handling the complexity of modern contracts is easier than ever before. In today’s competitive market, adopting contract management has become a strategic cornerstone for successful general contracting companies.
Below are the top seven reasons why investing in contracting software is a smart move for companies that are growing quickly—or hoping to.
What is contract management software?
Contract management software helps you get the most out of your contracts, comply with regulations, and control customer relationships. Standardized and collaborative contract management aligns everyone involved. It helps you to analyze key performance indicators(KPI) and identify areas of improvement.
Contract management software involves overseeing the creation, execution, and analysis of contracts. Using it, you can mitigate financial risks while also improving operational efficiency. An automated contract management system helps to streamline this. But how can you implement the best practices of contract management to enhance your business operations?
Best practices for contract management for your general contracting business
1. Streamlined contract creation
The most valuable benefit that contracting software can offer your business is, generating contracts and streamlining the process. By implementing contracting software, your business can reduce the risks of error and achieve greater efficiency.
Your business can save time and effort since the contracts are standardized and pre-approved of contract language and terms. The general contractor software has a set of standard templates with necessary elements to ensure no error.
Having standard contracts help your business to focus on other important areas. It ensures better compliance, and businesses like yours can better enhance their contract management workflow.
2. Streamlined approvals
Streamlining contract approvals is one of the best practices that yield numerous benefits for your business. With an efficient and automatic approval process in place, your business can enjoy the advantage of cost savings, hassle-free processes, and faster receipt of contracted maintenance and service jobs.
Contractor businesses involve many parties, including stakeholders and customers. Streamlined contract approvals have shorter cycles, making it convenient for all parties involved. Electronic signatures and approvals are available in contract management software, eliminating the need for paper-based quoting processes. In this way, you can reduce the risk of errors and speed up the quote approval process.
3. Automate customer communications
Emailing or posting contracts is outdated. Sending contracts with your customers back and forth in an automated communication can save your business time and costs and reduce risks of error. Start utilizing automated customer communication methods offered by contract management software to bring significant advantages to your business.
Cloud-based contract management software can store all your contracts in a centralized location—making it easy for your business to access them whenever needed. It also makes it easy to collaborate. General contractors can use comments and annotations to leave feedback on contracts, and also it has a chat feature to discuss contacts with other users.
Cloud-based systems can also automate tasks involved in contract management. For example, they can automatically send out reminders when contracts are about to expire to your customers instantly.
4. centralized contract repository
Instead of scattered shared folders and various formats, centralizing contracts into a contract repository is a crucial first step toward effective contract management. When all of your contracts are in one place, you can easily refer, access, and review.
Centralizing your contracts gives you better transparency and identifies potential risks and opportunities. It can help your decision-makers to understand your service-level business relationships.
When all of your agreements are in one place, it is easier to keep track of them and make sure that they are up-to-date. It helps to reduce the risk of missed deadlines and inaccurate information. It also helps to manage your compliance with various regulations, which protects your business from legal risks.
5. Regular Compliance reviews
Facilitating regular compliance reviews using contracting software ensures your business maintains adherence to legal regulations and terms. Non-compliance with federal, state, and local regulations can lead to severe consequences like penalties and potential risks to your business licenses.
Tracking and managing compliance with the contract terms are also crucial to your business to proactively identify and rectify any issues that occur during the contract’s lifecycle. In this way, contract management software helps to ensure that contract management is smoother and risk-free.
6. Integrate with other business apps
You can get the most out of your contact management software when integrating it with your other business apps. With integrating, you can get so many advantages, including accurate contracts and improved operational efficiency. Consider integrating your customer relationship management(CRM), enterprise resource planning (ERP), and accounting system apps into your contract management software to automate the contracting process.
For example, if your business gets a repair ticket from a customer in CRM, integration helps automate the contract process. It can automatically create a draft from a template and deliver the output within a few seconds. Manually doing it will consume time and effort, while integrated contract management helps reduce manual intervention without data duplication.
7. Get insights from reports
Both custom reports and visualized dashboards will allow you to get a comprehensive view of contracts. While standard reports provide limited insights, custom reports can help you facilitate a better decision-making process. These custom reports allow you to measure success rates, track productivity, and enable you to make data-driven decisions.
Consider adapting to contract management software with dashboards that present valuable report data in a user-friendly and visualized format. Visualized data provides you with more understanding of critical information and enhances the accessibility of data. With custom reports and dashboards, your business can get insights into your contract management and ultimately enhance business outcomes.
Using best practices is no longer negotiable if you are to maximize your company’s efficiency and ensure sustained growth. Implementing the best practices we have highlighted in this article is a crucial step toward improving your operational efficiency if you want to keep up with today’s competitive business environment. A flexible and comprehensive contract management platform will help minimize risk, reduce costs, and increase regulatory compliance.
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