Operational planning necessitates careful contract management. It's vital to have insight into all financial obligations and clauses, especially in difficult economic times, to determine which commitments are the riskiest, supplier risk identification and remediation, expense optimization, and revenue potential.
Digitally modernizing the contract management process can result in increased efficiency and lower costs.
On average, companies lose 9.2% of their annual revenue due to flaws in their contracting process. These losses are the result of a mix of missed cost-cutting and savings chances on the one hand and income opportunities on the other.
Ways in Which AI Contract Review Software Powers Expense Optimization
1. Financial Reporting: Financial reporting is one of the most critical features of Contract Lifecycle Management (CLM) software.
The software, in addition to providing basic contract status alerts, also generates reports on essential aspects such as:
Revenue lost due to missed deadlines.
The ultimate profitability of each contract by tallying the creation to the final deadline
The contract value, the detailed business impact of non-compliance, etc.
These financial reports offer useful information and assist teams in making business decisions.
2. Intelligent Contract Review: AI-driven CLM solutions automate contract review and negotiation based on contract type and clause, with workflow routing based on statistical values or inconsistencies between outside agreement and desired language.
Throughout the review, the AI tracks all modifications and keeps track of the most recent releases, providing insight through every detail, such as what was changed, when it was changed, and who changed it. This not only guarantees that all relevant provisions are included but also ensures that your business is audit-ready at all times.
3. Saves Money and Improves Accuracy: Humans will make mistakes despite multiple levels of protection and cross-checks. Each mistake has a cost, whether, in monetary terms, time, or efforts spent correcting it.
Contract automation technologies ensure that your company is protected from such undesirable situations by providing non-compliance protection and expense optimization.
4. Single Centralized Storage: Traditional decentralized document storage can cause a slew of problems, such as difficulties locating essential documents on time, file loss, absence of easy accessibility, and limited visibility into contract stages, to name a few. Repository software provides secure and centralized contract storage.
Multi-parameter search, dynamic reporting, and customizable dashboards are all possible. As a result, finding documents for the legal operations team is a breeze. Furthermore, with centralization, teams have constant access to and insight into files from anywhere in the world, allowing for improved cooperation.
5. Increased Security: Contracts are important private documents. You don't want to think about the ramifications of spilling coffee on a crucial contract you're working on, and you certainly don't want it to disappear.
Apart from reducing time and improving organization, storing papers on cloud-based software safeguards them from physical damage or theft, easing your mind. If you're worried about cybercriminals, a smart CLM solution ensures that your records are entirely safe; this is where their legitimacy lies.
6. Shorter Contract Turnaround Time: The primary goal of automating is to make the contracting process go faster. CLM solutions can automate operations such as processing massive amounts of contracts, labeling contracts for speedier review, and highlighting problematic words and clauses, among others.
Furthermore, it streamlines agreement demand intake, reduces turnaround time, and improves the correctness of best first draughts with self-service capabilities and a rich phrase library. This relieves the legal operations teams of some of their responsibilities and allows them to focus on more challenging tasks that AI cannot handle.