If you were to calculate the amount of time that your legal team spends on contracting, you might be astounded at the number of hours they devote to generating contracts, gathering approvals, and chasing signatures — not to mention, the time they spend searching contracts for specific language or tracking renewals and expirations. Or, if you needed insight into your existing contract portfolio, how long it would take your team to analyze every contract to find and report on the required information. All of those hours represent big money to your company — and in many ways, a waste of resources.
Wouldn’t your General Counsel's time be better spent on strategy and high value projects? Your legal department can be a significant partner in your business, helping you maximize opportunities and minimize risk — but only if they aren’t bogged down by handling requests, red-lining, manual drafting or other numerous contract lifecycle tasks. One easy way to reduce this misspent time is to use an automated tool that offers robust contract management reporting. With just a few clicks, your team can locate the information that they need, and be more strategic in how contracts are handled within the organization.
When organizations operate in heavily regulated environments — such as finance or healthcare — contracts must comply with strict federal and industry guidelines. But when the organization has hundreds of contracts, monitoring your compliance becomes challenging, especially when there is no centralized system for monitoring and reporting.
Risk management is also a challenge. Without access to the basic information required to fully understand how contracts will affect your company, it’s impossible to stay ahead of the risks and costs associated with each contract, and to make solid business decisions that align with the overall company strategy. Easy and intuitive access to contracts throughout their lifecycles via contract management software allows your legal team to carefully track and manage every commitment, milestone, clause, term, and condition that impacts your company, and provide the data necessary to meet your goals.
Many legal departments have been using Excel or other spreadsheet programs as a means to manage contracts. However, spreadsheets are only good at reporting on structured data, like expiration dates or currencies, that has to be manually entered. When it comes to unstructured data, like terms and conditions, spreadsheets don't cut it, since they cannot accurately, or automatically, capture that information. The result? The challenges mentioned before: an inability to capture a clear overview of pertinent information because it's stored in multiple places.
That’s why it’s important to use contract management software that will create up-to-date, thorough reports. In just a few minutes you can pull the information that you need to guide decisions, while also identifying potential risks, inefficiencies, and compliance issues. More specifically, you need a contract management program that can quickly compile the following reports:
Expiring contracts. One area that leads to significant revenue loss is expiring contracts. An expired contract can lead to significant operational disruptions and lost sales, but if your company is the contracting party, letting a contract expire could lead to a loss of incentives, supply disruptions, or automatic renewals that prove costly to the company. By generating reports highlighting contracts that are expiring within the next 90 days, your teams can strategically pursue those renewals, and prevent disruptions and revenue loss.
Inactive contracts. Just because a contract is inactive doesn’t mean that it’s no longer a concern. Legal issues surrounding contracts can last for years, and it’s important to stay abreast of potential issues so they can be addressed before they become a serious problem. Inactive contract reports can also reveal issues like workflow inefficiencies or payment term problems. Addressing these issues can make a measurable impact on the bottom line.
Draft and signature needed. Pulling regular reports on contracts that are still pending can reveal bottlenecks in the process and spur changes to improve efficiency.
Payment. With the right contract management software, you can filter contracts by specific criteria, such as payment terms, to identify the key liabilities and develop a more accurate picture of your company’s risks and opportunities. These reports may also reveal issues with breach of contract or noncompliance, allowing the organization to be more proactive in solving problems and avoiding future risk.
Trend analysis. Strategic planning requires analyzing trends and identifying those that present risks and opportunities. Robust contract management tools can provide that analysis. Exari’s Contract Management, for example, uses artificial intelligence to identify contractual risk and trends to produce an overall risk score for any contract or group of contracts, helping you identify weak or unfavorable contract terms. Armed with this information, your organization can make better strategic decisions.
Reporting is just one aspect of contract lifecycle management, but it’s arguably one of the most important steps. Knowing what your contracts contain allows you to leverage your position and mitigate risk, and avoid unpleasant surprises. Contact Exari today to learn more about how our platform can help your business.