How to create the perfect Contract Workflow

According to a Gartner study, by 2023, 90% of multinationals and 50% of SMEs will have Contract Management Software in place.

It does not matter which sector your organisation belongs to: managing contracts properly is essential to running it well and to protecting your interests in the event of disagreements with third parties.

This task often gets complicated by the sheer number of contracts to be managed manually. On top of that, these contracts are usually stored in shared folders and handled with the other parties over email.

Faced with this situation, organisations run into the problems that come with manual management: mistakes, loss of key documents, missed important dates and an overloaded team, among others.

The answer to such complicated contract management processes is automation.

When you automate with a contract workflow, you can create, negotiate, sign and track contracts quickly and efficiently, halving the time you spend on them.

First of all, what is a Contract Workflow?

A Contract Workflow is the process of managing a contract from its creation until it is completed, after going through a set of defined stages. Although it may look simple, and it differs from one organisation to another, the following steps are always required:

1. Gathering the information
2. Creating the contract
3. Negotiation
4. Approval
5. Signature
6. Renewal or termination

This process can involve anywhere from two to dozens of people, which is why managing it properly is essential.

The stages of a contract

Before diving in and building a contract workflow in a CLM such as Docuo, it is important not to try to replicate what you used to do manually. Although it may look like the best way to go about it, the process you followed by hand should only serve as a reference.

Once that is clear, the next step is to understand the cycle contracts go through, so you can see which of its stages you can improve through automation.

1. Creation

When you create a contract, it is vital to do it carefully and in line with the legal requirements of each country. Automation will free you from worrying about this, and from drafting contracts case by case; with Microsoft 365 templates, you can tailor contracts to your needs in a single click.

2. Review

Reviewing the contracts that are going to be sent to customers is essential. This operation can be sped up considerably with a CLM such as Docuo, which can tell you whether the contract is correct or needs changes, and show you where, from within the tool itself.

3. Negotiation

Handling negotiation over email can generate numerous versions of a single contract and confusion among the parties involved. With automation, not only will you keep the parties informed in real time and with the current version of the contract, you will also be able to configure your workflows to receive alerts when your turn comes round in the process.

4. Signature

All the changes have been made, the parties have finally reached an agreement and the time comes to sign, a process that can drag on for weeks. To avoid this, you can turn to electronic signature, which you can not only build into your workflows so that it happens automatically, but which, with an eSignature like Docuo’s, also means you are 100% compliant with the European eIDAS regulation.

5. Renewals

When your team is the one in charge of keeping an eye on renewals and expiry dates, key dates can slip through the cracks and cause no end of problems. To avoid this, automation is the answer, because it will send you automatic alerts and manage those contracts for you.

The advantages of having a Contract Workflow

As you already know, managing contracts is a complicated task that takes a lot of time and a lot of attention if you are not to overlook details and key dates. On top of that, making mistakes in this process can lead to financial losses, legal problems and more.

That is why having Contract Management Software is essential, and it brings you numerous benefits: reducing the cost, time and risk of management, improving the productivity and efficiency of both the process and your team, and avoiding disorganised tasks.

A recommendation for building a Contract Workflow in Docuo

Your organisation may need to carry out a large number of actions on its contracts, among other reasons because of the number of people involved. In that case, it is advisable to group the different stages into three and build one Workflow for each of them:

1. Creation, review and negotiation
2. Signature
3. Renewals

This one here, for example, is a Workflow for the creation, review and negotiation process:

For simpler processes, however, you can group the three stages into a single Workflow. The process can be adapted to whatever your organisation needs.

This is only part of what Contract Management Software like Docuo can do for you. Contact us and discover the rest!