If you’re considering a move towards contract management software, it’s likely you’re currently grappling with spreadsheets and shared drives and finding them inadequate. Whether you’re trying to list the requirements you need or simply need somewhere to start to get to grips with the variety of contract management tools available to you, this article will help you.
Before we start, it's important to note that "contract management terminology" and "contract terms" are two very different types of language. The latter involves looking in-depth into the clauses of a contract and the legalese this involves. If you’re looking for definitions for ‘Force Majeure’ or ‘Joint and Several Liabilities’, head over to our comprehensive glossary.
Contract Management Terminology
Contract Lifecycle Management definition
Contract Lifecycle Management is the end-to-end management of a contract. Although often used interchangeably with the term contract administration, it should not be confused with activities such as extracting key dates or inputting metadata into a system.
Contract Lifecycle Management involves activities across all stages of the contract lifecycle:
- Initiation: Stakeholders and potential suppliers should be identified
- Negotiation: Terms should be discussed ahead of a final contract being drafted and reviewed
- Execution: Finalised agreements are signed by all parties
- Start-up: Key aspects of the contract should be recorded and responsibilities for ongoing management should be assigned
- Monitoring: Tracking contract performance, risk and obligation fulfilment is critical to knowing if agreed outcomes will be achieved
- Renewals: Effective renewal management means tracking key dates and acting ahead of time
- Completion: If a contract isn’t renewed, performance should be measured against the KPIs and any gaps in the record should be completed.
ContractNow supports contract lifecycle management by delivering visibility and control alongside the ability to centralise contracts in a repository and quickly find contract clauses such as those relating to Auto-Renewals.
Contract Repository Definition
A contract repository is centralised location to store all contracts and related documents. Depending on the maturity of your business you may currently be using an Excel Spreadsheet to house this information, but this will quickly become unsustainable as your business scales. A cloud-based contract repository suits today’s businesses better.
If you fail to store your contracts centrally, a lack of visibility will increase contract risk. Manually capturing information can also lead to human error and data fragmentation.
ContractNow offers a cloud-based contract repository, allowing your business to extract and upload its key metadata and store in a secure, cloud-based location. It provides your business with a single source of truth, allowing you to easily identify upcoming events, potential risks and any gaps in the portfolio that need to be filled.
A contract repository offers your business multiple benefits, including:
- Total visibility so you can build a comprehensive view of your obligations
- Data security giving you and your suppliers confidence that information is protected
- Time savings as teams no longer need to spend hours trying to locate information
- Improved compliance as contract owners can identify documents reaching expiry
- Scalable growth as contracts can be easily added to the repository
Contract automation definition
Contract automation is the use of software and technology to make contracting processes more efficient. Depending on your business’s requirements certain parts of a contract’s lifecycle can be automated but so can the whole process - allowing your teams to invest their valuable time in more strategic areas.
If your business is using manual processes, it may be that your contracting processes are cumbersome. Manual contract management can make it difficult to track information, resulting in missed renewals, hidden risk and business decisions being made on inaccurate or incomplete contract records .
By automating your contract management processes you can streamline your internal processes, reduce administration and swiftly execute agreements."
ContractNow delivers the benefits of contract automation through its AI Extract engine. It allows your business to scan and extract contract metadata and create a digital record. Not only does this automation increase efficiency, but it also improves the accuracy of your records so stakeholders can always have confidence in the data they are working with.
Contract Obligations definition
Contract obligations are duties defined and agreed to when a contract is signed. Each party is legally responsible to fulfill the agreed duties or the contract will be in breach. Contract obligation management requires diligent monitoring, frequent contract reviews and corrective action if duties aren’t being fulfilled.
Depending on the size of your business, the complexity of agreements or how many third-parties it’s using, tracking and managing obligations can require a lot of time and resources. However, contract management software eases the workload by bringing issues such as non-compliance, renewals and poor performance to light.
If you’re not aware that contract obligations aren’t being fulfilled, your business could be risking non-compliance, leaving it vulnerable to legal and financial consequences."
ContractNow puts you back in control of your contract obligations with automated notifications. Whether a certificate is reaching its expiry date, a contract is coming up for renewal or key metadata still needs to be provided, alerts can be triggered automatically letting stakeholders know that their attention is required.
This automates obligation management and puts businesses in a much stronger position when it comes to compliance.
An eSignature, also known as an electronic signature, is a digital way to sign contracts. Formats can include a scanned ink signature, a hand signature made on a tablet or typed initials. eSignatures are legally binding when they are compliant with ESIGN, UETA and European eIDAS standards.
eSignatures are suitable for businesses that are looking to create new efficiencies in the contract processes, especially if they want to minimise time-to-signature."
Not only does ContractNow offer unlimited eSignatures with its dedicated eSign solution. Your business can sign contracts anywhere, any time on any device. Not only does this create greater flexibility to sign on the go, but electronically signed documents are automatically stored within the contract repository.
Using digital methods to sign agreements provides better auditability in comparison to paper trails or trawling through inboxes to find a signed contract.
Your business can have instant access to a full history of the contract record including when it was sent for signature, who signed it and when. Contracts are no longer kept in silos.
Whether you’re new to contract lifecycle management or you’re in the first steps of looking for a new solution for your needs, there are a number of terms you need to know.
The contract management terminology outlined in this article not only provides an overview of the general activity, but also provides some ideas about what your business needs next.
If you have any questions about how ContractNow can support your contract management requirements, or if you would like to know more about any of the features outlined, please get in touch.