When each stage of your contract process flows smoothly from one to the other, you’re less likely to experience delays. Your contracts go where they need to, and they get there fast. A seamless process means your deals close faster, your cross-functional teams are on the same page, and your business recognizes revenue on time every quarter.
Unfortunately, for most companies, this is more dream than reality. In practice, many legal teams experience bottlenecks at all stages of their contract process. These kinks in the contract workflow can rob you of millions in revenue — so there’s no room for them in 2023.
Start by looking at the contract process as a whole: Is movement through the workflow automated, or does it depend on human intervention to move to the next step? Where in the process do you experience the most bottlenecks, and do you have a dashboard representing this data? This insight into your contract workflow can tell you where to make changes (and what changes you need to make) to enable a more seamless contract process.
Here are six tips for optimizing your contract workflows.
For teams that still create every contract from scratch, contract creation is a time suck. For teams that can’t track their versions and use unapproved templates with outdated language, everything that comes after contract creation is the true nightmare. This is the first step of the contract process and an important one to optimize.
Pro Tip: Automatically create contracts from pre-approved templates. Integrate your CRM or other tools based on pre-specified criteria, standardize your agreements, and centralize communication so that creating contracts becomes as easy as clicking a button.
The proper redline etiquette isn’t always obvious, but a general rule of thumb is to aim for a suitable compromise as quickly and painlessly as possible. When counsel doesn’t follow that rule of thumb, redlining can get out of hand — redlines on redlines, red markups everywhere, and the original version lost underneath.
On the flip side, endless redlines may be necessary if you don’t do your due diligence in the contract creation phase. The constant back and forth of redlining can demand a lot of valuable time — the opposite of quick and painless.
Pro Tip: Observe proper redlining etiquette by maintaining the balance between protecting your business and compromising on language with your signer. Additionally, you can use analytics to determine the most redlined terms and use AI to identify and replace them with terms more amenable to your partner.
What’s the point of all the redlining if you don’t know who is responsible for approving the proposed changes? After all is said and done, if your contract is just sitting in your inbox waiting for someone to pronounce it finalized, then there’s a major bottleneck in your contract approval process.
Pro-Tip: Decide who approves your contracts. When can sales give the okay, and when does legal need oversight? Then, use CLM to track the progress status of the contract and send notifications to the appropriate stakeholder when it’s time for their review.
The time between final approval and collecting signatures can take anywhere from a few minutes to a few weeks. It leans towards a few weeks when the other party has to print the contract to sign it, then scan and resend it. A manual signing process can be a massive bottleneck in your contract workflow.
Pro Tip: Take advantage of eSignature technology to accelerate contract signing. Replacing the print-sign-scan process with a digital workflow means you can collect signatures faster. Make the contract available online and in the most common environments the signers use (i.e., Slack, Salesforce, etc.) so the agreement can continue to move seamlessly through the business.
During the contracting process, all relevant stakeholders must be aware of the document status. And given how annoying it can be to constantly check whatever system you use for an update, setting up notifications is a smart way to relieve that stress.
Pro Tip: CLM provides visibility into contracts and allows you to set up roles based on how each person interacts with a particular agreement. This also encourages a collaborative approach to contract management, as it grants everyone, not just legal, access to important agreements.
How well you store your contracts generally reflects the health of your contract management process. Many teams still store their contracts all over the place, including filing cabinets.
Pro Tip: Store your signed agreements as machine-encoded text and in an easily accessible, centralized location. This way, you’ll have all your contracts at your fingertips, and you can easily search both the entire database and individual contracts.
Smooth contract workflows are crucial to successful businesses. Bottlenecks can corrode your contract value and introduce delays that diminish the administrative costs of your agreements. Addressing the obstacles in your contract workflow one step at a time gives you a manageable plan of action for seamless contracting in 2023.
See how you can set up frictionless workflows using LinkSquares. Request a demo today.