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Contractor Management Software: Business Benefits & Importance In 2022

Updated: Jul 26


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Streamlining any business activity starts with a tool that enables team members to collaborate quicker and more effectively. By using paper-based systems, the team can't get real-time information. A project's success will be greatly improved if every team member has access to real-time data. Managing contractors and their contracts is no exception.


This article examines how contractor management software helps businesses streamline operations more effectively.


What is Contractor Management Software?


Using Contract Management Software (CMS), you can create, edit, track, and renew contracts throughout their lifecycle. With a CMS, you can combine multiple functions into one tool so your staff can find information easily, including a centralized repository for contract information. You can automate repetitive tasks with templates and other features. There are also analytic reporting features that allow you to analyze and optimize future contracts.


Many companies place great importance on contracts during the formulation of an agreement but tend to forget them after they've been signed. But contracts are active long after they are signed. A contract should serve as a guide for the duration of an agreement. In order to ensure the parties are living up to their responsibilities, they should be consulted continuously.


During the course of a contract's lifecycle, however, the contract may pass from one department to another, and a lot of critical details may escape notice. A poorly managed contract can lead to a 9% loss of revenue. Keeping the contract available and relevant at all times is just one way management software can keep the agreement on track.


Improving Project Success with Contract Management Software


Decrease Time for Data Upload


A paper-based contracting process wastes time. The time staff members spend traveling back and forth between the office and client sites, for example, is much larger than the time spent entering the data they have received. Employees often work during their commutes. With the help of cloud-based contract management software, employees don't have to worry about waiting to get started. Contracts can be inputted instantly, attached with relevant files, and updated as needed.


Improve Enforcement of Pre-Approved Legal Language


Employees often grab the latest contract template from the office before leaving for a client visit in order to save time. Despite their good intentions, this action causes two problems.


Firstly, they may not be working with the latest contract template. If your company lacks version control, it could create a contract that contains problematic clauses. Secondly, employees may not be aware of the correct clauses if they are not able to locate the latest contract templates. The two situations could be solved with a centralized archive of the latest contract clauses and templates:


  1. Your company would update this library so there would be no question about where the latest files should be found.

  2. Employees clearly understand which clauses they may use, resulting in more effective enforcement of your pre-approved language.

  3. Due to the real-time tracking within one system, version control issues are no longer an issue.


Collaboration is Enhanced


Unlike a paper-based system, management software allows managers to create task lists to keep teams organized. Employers can schedule emails and assign work through automated email alerts, which keep them engaged. Check-in and check-out features are also available for managers to monitor employee activities.


As you increase the visibility of the activities of the team members, you not only hold everyone accountable but also improve team collaboration. Your contracting process will be more efficient if you create a list of tasks so that everyone within your organization knows when their task is due or when another task is completed.


Who Can Benefit from Contract Management Software


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An essential component of contracts is their role as a formalized handshake between two parties, guaranteeing transparency, accountability, and the ability to adjust as needed. Contracts govern all business relationships with clients, employees, vendors, or anyone else.


Procurement Teams


Procurement teams negotiate the contract terms and conditions as part of their work to find, establish, and build new relationships with vendors. Procurement teams using contract management software have better insight into the efficiency of contracts, so they can better determine whether a business relationship will enhance business goals.


Legal Departments


Legal teams face the most pressure from all the departments that touch a contract. Software for contract management reduces risk and ensures contract compliance by providing an easy way to enter contracts and identify problem clauses.


In addition to producing risk analysis reports and compliance tracking, the software can analyze all contracts within the organization. Additionally, legal teams will have access to a library of pre-approved clauses and other tools to streamline the process of assembling and submitting documents.


HR Departments


By centralizing and tracking documents like offer letters, NDAs, and other hiring documents, HR teams can simplify the tedious process of hiring and onboarding new employees. The contract management system helps HR teams organize company documents and give appropriate access to them across a range of materials. The right information is accessible to employees, everything from employee handbooks to company policies to expense reports.


Finance Departments

It can be challenging for finance teams to extract meaningful insights from huge amounts of data. Unpaid revenue and underperforming services can easily be located and identified with business management software. A contract linked to your workflow will help you avoid penalties for late-payments and unmet terms. Using a management software system, you can organize your cash flow to contracts and terminate them in real-time while ensuring all parties are working from the same contract version.


Does my Business Need a Contract Management Software System?


No single business is alike, but many companies reach the point where their bottom line suffers due to managing contracts through Word documents and PDFs. Many companies feel the pressure when their contract management load reaches around 20 contracts per month.


The sole job of a contract specialist or manager is to manage and maintain contracts. You may benefit from a contract management tool if you are considering hiring a contract specialist. Even though contract specialists can alleviate some of the burdens of contract management, they cannot eliminate the root cause of the problem - manual, meticulous, and human error-prone contract lifecycle management processes.


Eventually, you will need to hire a contract manager to help your business grow. At some point, you'll need someone to oversee the contract managers. By accumulating more contracts, there will be more information to sift through, and your contract practices will become more challenging to revise. Successful contracts shouldn't be complicated. You can scale your business without hiring more staff with the best contractor management software system.


Your contracts will be clear, convenient, and legitimate with these platforms. A contractor management platform allows some businesses to manage thousands of contracts by a small team.


How To Choose the Best Contract Management Software For You


Choosing which contractor management software to buy is one thing, but actually buying it is another. A variety of options are available. Are you new to contractor management software and wondering how to make a decision?


In the end, you need to fully understand your contractor's requirements. The software should be seamless and easy. You can be confident in your decision if you ask yourself these relevant questions.


1. Is it Expensive?

Choosing the cheapest contractor management system is not the only factor to consider. Getting the best return on investment is what you need to focus on. You must ensure that the software is efficient. Technology should alleviate resource pressure and automate manual tasks rather than work against you. For the software to benefit you, consider how much time will be spent on implementation and management.


2. What are the Features that Your Business Needs?


There is no need for flashy features and functionality if it doesn't deliver business value. Choose a solution that aligns with your business requirements, not one that looks fancy.


Can the software detect expired licenses, send alerts, and locate qualified contractors? How flexible is the system?


A feature that doesn't deliver value won't matter and will just impede your efforts. A simple system is better than a complicated one.


3. Is it Easy to Implement?


The right contractor management system should be up and running quickly. Time and resources will be wasted if the software is difficult to implement. Additionally, the longer you wait to implement the software, the longer you'll have to wait to see any benefits. Whatever system you choose, ensure you'll be able to implement it easily and that you'll have support if needed.


4. Usability of the Software


It's important to start using contractor management software as soon as possible. Choose an easy-to-use system. An intuitive user interface and a top-level dashboard are essential. Try it out to get a feel for the user experience. Make sure you are comfortable with the software by asking for a guided demo. You may need some training and support to get started, so if this is the case, ensure that it is readily available.


5. Can Your Contractors Use It?


You need contractor management software so that your contractors can also use it. Consider your chosen solution from their perspective. From their perspective, ask yourself whether training is required. Your contractors need easy-to-use software if you want them on board.


You should consider a provider that will support you and your contractors by phone and email. Consider the support's location. In the end, you'll end up back where you started if the contractor experience is not adopted and used.


What Are the Benefits of Contract Management Software?


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Contractor management software helps you grow your business - and grow it better. Contractor management services provide you with more insight into your contract efficiency and enable you to take action quickly to optimize it.


Increased Speed

Using contract management technology, you'll save a lot of time and hassle when creating contracts. Your terms and clauses will be updated automatically across your entire system as you optimize your contracts.


Better Collaboration

The real-time editing of a document is possible with contract management solutions. Having everyone work from the same contract version provides greater flexibility and allows for more fine-tuning.