Companies that do not control their contracts with a centralized system that protects their contracts are exposed to unnecessary risks and increased costs. To prevent these costs incurred in addition to those associated with non-compliance, companies must assess the use of the automated contract management system to help them manage contracts and contract documents across the organization, using the document management system, how? Follow the article.
Definition of contract management
Contract management is a process of contract negotiation, drafting, execution and management, including the establishment and retention of accurate records of all communications and correspondence with Contracting Parties. Contract management also involves monitoring compliance with contract terms and tracing any changes or modifications required. The contract management platform specifically helps companies to manage their operations efficiently and effectively.
Difference between contract management and document management
There have been many similarities between contract management systems and document management systems. However, there are substantial differences between the two, which means that they are not interchangeable software solutions. Each system is stand-alone and indispensable. These differences are as follows:
Contract management is the process of negotiation, drafting, execution and administration of contracts, including the creation and maintenance of accurate records of all communications and correspondence with the Contracting Parties, and also involves monitoring compliance with the terms of the contract and tracing any changes or modifications to be made, on the other hand.
Document management is simply the process of organizing and storing documents, as this can include scanned documents, electronic files or even physical papers.
Although the functions of both contract management and document management disagree, contract management and document management systems can work together to improve overall business efficiency, for example a CMS can help (CMS) in automating the contract creation process, while the destination management system can (DMS) help store and track documents, this will allow companies to find information quickly and easily, and will also help improve compliance status.
The importance of contract management using document management
Contract management through paper, email or partial digital solution is time-consuming and stressful. Contracts are too important to store on paper that may be lost or mistaken. In addition, sending them back and forth for review and signature by regular mail slows the process and introduces the possibility of human error.
Document management implementation provides a comprehensive solution that automates the functioning of the contract, enabling stakeholders to see the progress of the contract from first review to completion, and removes unnecessary process steps to save time and effort.
How to control contract management using document management
Using the document management solution in the contract management of your business, you will be able to control a range of special processes that are essential to the functioning of contract management, including:
- All contracts will be stored in one central system.
- You can easily access and manage all contracts and drafts,
- The template library allows for easy contract preparation.
- You have assurance that the final parts of the contract will not change at a later stage.
- The contract agreement process is much faster thanks to electronically designated tasks.
- The contract agreement process can be adjusted in accordance with the company's internal procedures.
You will also have complete control over:
- Identify the current status of the contract (preparation, circulation, signature, dispatch, signature by all parties, invalid, etc.) as well as the relevant responsible parties
- Receive messages about the actions carried out with your documents; and obtaining reminders on actions to be taken (contract extension, etc.).
- Find the required contract or any relevant information immediately.
- Protection against deletion or loss of contracts.
- Review and approve contracts directly from mobile app.
- Get rid of low value added work, where a smart system automatically performs many tasks such as filling out a document card, transferring a document or sending reminders.
- Ensure that contracts are administered in accordance with the company's internal procedures and national legal requirements.
Importance of central contract management
The dissolution of document management and the central contract will not only save unnecessary expenses in contract management; There are many other benefits including audit record, central warehouse, automated alert, workflow automation, release record, security control, and process scalability.
This centralization is particularly necessary for the management of third-party vendor contracts that can exist across an enterprise in a variety of departments, and a single, clear picture of the entire life cycle of the contract will provide the enterprise with an incredible (and potentially expensive!) headache.
Advantages of solving central contract management using document management
The use of document management solution in contract management offers clear benefits and a very close return on investment, as well as the following advantages:
By using document management, contract management lets out the impossible effort to determine who made changes to an agreement, by tracking the entire contract life cycle within a centralized system.
You can bypass the audit record to provide employees with a simple and centralized contract management location, searchable for all supplier agreements and supporting documents.
You can use the automated alert feature in contract management to notify about contract terms information.
Automation of workflow:
Some contracts may have a specific workflow and approval process involving several sections, through which the contract management system is tracked with automated workflow approval from different departments.
Automated work in contract management allows the new issuance archives to be shown and tracked.
Sensitive contracts and documents cannot be controlled if they are emailed, thus enabling you to have everything in a central solution in contract management, allowing you to determine who can view the specific contracts and documents.
Changing a non-automated process gives rise to a unique set of business challenges for your business, so a central solution in contract management will enable you to improve your process over time, while being easily scalable.
Both contract management and document management are very important automated duos in business development, Both systems allow you to access and store data in different ways document management system stores data in volumes and sub-folders, This makes it easier to find what you are looking for, while the contract management system stores data in an electronic database, which can be searched by keywords or phrases.
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