Why is contract management important for small businesses
No matter what industry or area you operate in, contract management for vendors, employers and customers is likely to be a daily occurrence. According to consultancy PwC, the average number of contracts per organisation is 20,000 - 40,000 with a majority of all business transactions being governed by contracts.
Contract management important for small businesses?
Contract management for small businesses is becoming increasingly relevant. It’s essential that not only are contracts legally sound but that every effort is being made to ensure these contracts position the business for high productivity and growth.
The most advantageous contract terms can be pursued when rigorous contract management is followed. Businesses can immediately check their contracts to ensure that they don’t violate terms or otherwise damage customer relationships through accidentally breaching the letter and spirit of the law. Businesses can also keep on top of all current obligations with clients or vendors through embracing contract management best practices.
Benefits of contract management tools for small businesses
Effective contract management is key for small businesses and can help them overcome multiple challenges they may face, enabling prosperous growth and success.
A report into the audit challenges of small businesses by The Institute of Chartered Accountants in England and Wales (ICAEW) suggests that too many small businesses start up and operate without a long-term plan in place. While this may work in the short-term, over time the lack of a clear audit trail may hamper future deals and business growth. In the worst case scenario it may have legal repercussions.
There are clear benefits to managing contracts properly. DocuSign’s digitally signed Certificate of Completion enables small businesses to quickly create and view necessary audit trails. This keeps things efficient and simple, ideal when time resources may be limited, and creates an automatic record for every step of the contract process - from signing locations to the chain of custody. This digital record can then stand up to scrutiny and review when required, while also removing the need to rely on out-of-date, manual processes like sign-in forms.
Time and money resources can be a precious commodity for many small business owners, so ensuring their cash flow is vital to their ongoing success. Delayed payments can have a potentially devastating impact on a small business. Integrating the payment collection process through DocuSign Payments can be a lifesaver for smaller businesses. It allows contracts to be signed and paid in a single step – streamlining the entire payment process, reducing the chance of non-payment, improving cash flow and simplifying the management of contracts.
Similarly, effective contract management can be a crucial ally for the sales function within a small business. Both stakeholders and reps tend to live within their CRM, and want to maximise the value they deliver while doing so. Ideally, they wouldn’t need to leave salesforce to create contract after contract – a waste of time better spent generating results. DocuSign Gen for Salesforce solves this problem and gives reps the power to create and manage agreements without having to leave the Salesforce platform. A simple solution that can pay dividends in the time it frees to be spent on more value-adding tasks.
Top contract management best practices for small businesses
Spending time on contract management best practice is unlikely to be at the top of the agenda for many businesses, but it’s vital to ensure that it is considered. With potentially hundreds upon hundreds of contracts active at any given time, a poor and ineffective framework can result in a lot of time wasted in manually sorting and checking contracts, let alone clarifying specific details.
It may sound trite, but time really is money, and if multiple employees are investing their time and resources in dealing with contracts, this will affect the bottom line. This means that investing smartly in time-saving contract management processes and systems – including electronic signatures and payment integration - quickly pay dividends for many small businesses.
DocuSign CLM (Contract Lifecycle Management) allows businesses to take advantage of innovative technological solutions that can make contract management an easy proposition. Errors can be avoided due to the automatic contract creation, as well as edited and reviewed to ensure all key points are included, in comparison to manual methods that take more time to create and are vulnerable to human error.
Both ease of use and compliance are central to contract management with DocuSign, ensuring all signatures are compliant with local electronic signature standards without having to deal with complex IT systems.
Contract management for small businesses
Traditionally, putting effective contracts in place often meant dealing with a seemingly endless amount of time-consuming paperwork and stressing out even the most resourceful person. When businesses implement an effective contract management tool, stacks of unorganised paperwork can be turned into an intuitive platform that provides genuine benefit to your operations.
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