What were the contract terms? Where is the contract? Who signed off on it? What do I need to know?
Imagine you are sitting down with your CEO and he is firing all of these questions across the table, giving you barely enough time to say “I don’t know” before he moves on to the next, getting angrier and angrier with each response. If you – whether you’re a chief counsel, a first-year legal hire or somewhere in between – are unable to come up with the necessary answers your CEO and company requires, how do you think the rest of the company, from procurement to sales to services, will have the necessary answers they need to remain compliant?
Well, they won’t. Without true end-to-end contract visibility, legal teams will never have the complete confidence of total compliance, nor the ability to provide the necessary insights that drive business outcomes.
The Life of a Contract
The legal contracting process is not a siloed function. From the solution configuration through pricing and quoting, every portion of the sales process needs to be reflected in the contract. Conversely, once the final contract has been finalized, it must not simply be placed into a metaphorical filing cabinet, never to be seen again. Through revenue recognition and renewals, and into the back-end systems, the final legal clauses must be the backbone of every action. By taking the contract clauses out of the cabinet and equipping all members of your team with the necessary simple and institutionalized visibility, businesses can ensure that the important legal agreements are reflected in every action taken by an employee. New legal management technology is doing just that, equipping teams with the necessary contract visibility to reduce corporate compliance risks.
Cloud-Based Contract Management Systems Provide the Necessary Insight
Quote-to-Cash and the embedded cloud-based contract management solutions are solving many of the compliance issues companies face every day (sometimes unwittingly) by moving contracts and their previously hidden clauses into the cloud. According to one impact study, such contract management solutions are increasing compliance by up to 37 percent. These solutions are not simply equipping legal teams with what they need to increase contracting speed and win more deals; the fully integrated quote-to-cash footprint (encompassing configuration, quoting, contracting, billing and revenue recognition) is providing the necessary end-to-end visibility required to answer any question posed by an involved CEO.
Key Contract Management Capabilities Needed to Ensure 100% Compliance
Today’s contracting technology is providing executives with the confidence necessary to make important decisions. Below are four of the most important contracting capabilities to look for when deciding on a contract management solution.
Cloud Contract Repository with Easy Search
By moving contracts to a secure contract repository in the cloud, businesses enable complete visibility through powerful search capabilities and easy access. Such technology eliminates the risk of a lost contract or clause.
Advanced analytical capabilities are required to reduce compliance breaches. By providing insights into expiration dates, owed payments, nonstandard contracts, etc, companies will know when actions need to be taken.
Pre-approved Contract Drafting
Having a pre-approved process for drafting contracts substantially reduces the risk of nonstandard clauses slipping through the cracks. It allows legal teams to choose the correct structure, enter information and finish drafts all in line with legal standards and guidelines.
Complete integration with the sales process and the back-end processes following deal close is extremely important for providing the needed information to ensure companywide compliance. Employees need to have info on what the contract specifies, such as what needs to be provided, at what price and with what standard of delivery and service.
The contracting process has always been siloed. It has been confined to the back office, away from other essential business segments, and viewed as more of an impediment to growth than a boost. This is no longer the case. The demands of modern business require a more integrated approach, one that creates faster, more efficient actions for both the organizations themselves and the customers they serve. Such cloud-based contracting solutions as described above are equipping legal teams and the companies they support with the needed visibility to remove compliance risk and enable the confidence executives need to make business-defining decisions.