Contract lifecycle management is undeniably one of the backbones supporting any type of business. From simple transactions and procurements to larger acquisitions and deals, a contract is needed to make the agreement legally binding. As such, it is important to implement an effective and efficient end-to-end contract management system that will make the whole contract lifecycle easier.
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What is end to end?
Like what the name implies, end-to-end describes the process in which a system or service delivers a complete and functional solution from the beginning to end. When it comes to contract management, a good end-to-end system must support the drafting of the contract up to its renewal/termination. End-to-end contract management optimizes the performance and efficiency of a business by eliminating as many middle layers, steps, and/or third-party influence.
What is the lifecycle of a contract?
Contract life is the process that details how a contract is written, reviewed, signed, and implemented. The lifecycle of a contract consists of seven stages, starting from its “birth” to its “death”. One of the most basic forms of contract lifecycle is planning- implementation- pre-contract- handover- contract, pre-renewal, post-contract.
Does a contract expire?
When a contract is about to expire, all parties involved in the agreement may come together to negotiate possible extension, renewal or termination. The expiration of the contract depends on the terms discussed during the negotiations. It can be a definite date or by the end of a specific project. Whichever the case may be, once the contract expires, there are some possible legal ramifications if one party continues the term without the consent of the other. Missed expiration of contracts can also result in increased renewal costs.
More on this topic: Zendoc handles your post-contract management.
What is the Contract Lifecycle Management (CLM) process?
The contract lifecycle management (CLM) process refers to the automating and streamlining of contract processes during key stages of the contract lifecycle. CLM can help businesses have a more organized and detailed contract repository, as well as greater efficiencies in the contract process. Basically, a CLM process maximizes a business’ performance in handling contracts while minimizing cost, labor, and time.
What is CLM in law?
Contracts are legally binding agreements, so proper contract management can help in mitigating undesired complications, such as higher legal risk, poor contract approval process, and difficulty in auditing contract paper trails. The CLM system helps businesses manage their contracts throughout every step of the contract lifecycle, making it possible for businesses to be more effective and efficient in handling deals and agreements that leads to its growth.
How do you handle a contract?
It is not an overstatement when people say contract management can make or break a business. Contracts greatly affect the profitability of a business due to its emphasis on revenue and expenses. With the help of a proper contract management software, all parties involved in every stage of the contract can have secure access to the document and paper trail. The centralized repository offered by most CLM systems can also help in organizing and sorting out contracts. Setting up an automated notification or alert when a contract is about to expire is also a must to prevent unwanted legal consequences and costs.
More on this topic: How do you handle contracts?
About Zendoc
Zendoc is a full-service AI-powered contract automation system that not only organizes all of your agreements into a single database but keeps you up-to-date on what you need to do to extract as much value from your contracts as possible. You don’t have to worry about forgetting your obligations because you don’t have to remember them in the first place.