Contract automation is rapidly changing the way businesses manage their contractual agreements. Today, companies no longer have to rely on the labor-intensive process of manually drafting, reviewing, and executing contracts.

Instead, they can streamline the entire process with the help of modern contract automation software. Automated systems help reduce the time it takes to complete the contract approval process by up to 90%. 

Despite the obvious benefits of contract automation, many businesses are still uncertain about where to start or how to integrate contract automation software into their existing workflow. In this blog post, we will explore what contract automation is, its benefits, and how businesses can get the most out of contract automation tools. We’ll also examine some factors businesses should consider when choosing the best contract automation tool.

Contract automation 101

Optimizing contract generation, review, and management is critical to success. Traditional paper-based contract workflow processes are time-consuming, prone to errors, and lack the efficiency needed for modern businesses. The solution is contract automation, a digital approach to contract management that uses software to streamline the entire process.

What is contract automation?

Contract automation is the use of technology to create, manage, and review contracts. It’s a digital approach to contract management that automates the entire contract lifecycle from creation, review, negotiation, signing, and management. It involves using software tools and technologies to streamline contract workflow processes, reduce risks and costs and enhance overall productivity. Contract automation is useful for businesses of any size, from small startups to large corporations, and any industry, from finance and healthcare to manufacturing.

Benefits of using contract automation software

The benefits of using contract automation software are numerous. 

With automation, businesses can manage contracts seamlessly and efficiently throughout their lifecycle. This means that companies can spend less time drafting and reviewing contracts and instead focus their attention on other critical business functions. They can automate repetitive, manual tasks such as data entry, form filling, and documentation. 

Contract automation software can improve the accuracy and quality of contracts by reducing errors and standardizing contract templates. It can enhance compliance and mitigate risks by enforcing rules, terms, and legal requirements, and alerting users of any potential issues. Finally, it can increase transparency, accountability, and collaboration by providing real-time access to contracts and automating notifications and reminders. 

Understanding the contract management workflow

The contract management workflow creates, reviews, executes, and stores contracts. It involves multiple stakeholders, including legal, procurement, sales, and finance departments. Contract automation software can help optimize the workflow by reducing errors, streamlining processes, and increasing efficiency.

Basics of contract management workflow

Contract management workflow begins with the creation of a contract template. The template is then customized for each new contract by adding variables such as names, dates, and product descriptions. The next step is to review the contract to ensure it complies with legal requirements, industry standards, and company policies. After the review, the contract is executed and signed by both parties. Lastly, the contract is stored in a secure location for future reference.

Contract automation tools to optimize the process

Several contract automation tools available in the market can help optimize the contract management workflow. These tools include contract generators, contract review software, and contract management software. 

Contract creation and generation tools

Managing contracts can be complex. But with the right tools, the process can be streamlined and made more efficient. Online contract makers and contract generation software are two of the most popular tools for creating and generating contracts. Below, we will go over some of the features of these tools as well as their benefits and limitations.

Overview of online contract makers

An online contract maker is a tool that allows users to create legal contracts quickly and easily. These tools are often equipped with pre-built templates. And these can be customized according to the user's specific needs. Some popular online contract makers include InCloud Ontra, Jotform Contract, and ContractPodAi. These tools can be accessed from anywhere, making them ideal for remote teams or individuals working on contracts.

Features of contract generation software

Contract generation software is another tool that can significantly help streamline the contract creation process. These tools are usually powered by AI algorithms that can automatically generate contracts from scratch or optimize existing ones for better performance. Features of contract generation software include customized contract templates, e-signatures, automated approvals, and remote access. This software can also keep track of contract deadlines and renewals, making it easier for companies to stay on top of their legal obligations.

Benefits and limitations of using automated contract creation tools

A significant advantage of using automated contract creation tools is their ability to save time and reduce the risk of errors. They also allow legal teams to focus on more value-added tasks than drafting and reviewing contracts. However, these tools may not be suitable for complex contracts that require expert legal insight. Additionally, the cost of using automated contract creation tools may not always be justifiable for smaller businesses or organizations with limited budgets.

Factors to consider when choosing the best online contract maker

When choosing an online contract maker, consider its features provided, pricing models, and level of customer support. Additionally, take into account the ease of use and integration with existing tools. It is also essential to ensure that the online contract maker complies with relevant security and privacy regulation. This is to prevent any data breaches or loss of sensitive information. By choosing the right contract creation tool, businesses can save time, increase efficiency, and improve their bottom line.

Streamlining contract review process

Contracts are binding agreements that help outline the scope and parameters of a business relationship. However, reviewing and finalizing contracts can be time-consuming and complex. It requires a thorough understanding of legal jargon and the rights and responsibilities of each party involved. This is where contract review automation comes in handy.

What is automated contract review

Automated contract review involves using AI contract generators to review and analyze contracts for accuracy, completeness, and compliance with legal regulations. The AI algorithms can quickly identify any discrepancies, missing clauses, or other issues to address before finalizing the contract, which helps reduce the risk of errors and ensures that the contract meets all legal requirements.

Advantages of using AI contract generators for contract review

The main advantage of using AI contract generators for contract review is the speed and accuracy with which the software can analyze complex legal documents. This can save businesses valuable time and resources that would otherwise be spent on manual contract review. Additionally, AI contract generators can help identify potential risks or legal issues that human reviewers might overlook.

Limitations of contract review automation

Contract review automation can be a useful tool for streamlining the contract management workflow. But it’s important to note that it is not a perfect solution. AI contract generators may not be able to fully interpret the nuances of legal language or account for contextual factors that could impact the interpretation of a contract. Additionally, certain legal requirements or regulations may require human review and approval. That’s why it’s important to use contract review automation in conjunction with manual review by legal professionals to ensure the contract’s accuracy and validity.

Automated contract management

Contract management software can help streamline the entire contract management process from creation to storage. Automated contract management software can also help organizations monitor and track contracts, ensuring they comply with legal requirements and deadlines.

Benefits and drawbacks of using automated contract management software

Automated contract management software has numerous benefits, including reducing contract cycle times, decreasing contract risks, and improving collaboration between departments. Moreover, automated contract management software can store and track contracts in a centralized location, making it easy for different departments to access them. Additionally, contract automation software can automate tasks such as sending contract requests, managing contracts in different phases, and reporting on contract performance.

Contract management automation tools also come with some drawbacks. For instance, automated software cannot replace human oversight because contract review and approval typically require human decision-making. Moreover, when dealing with complex contracts, automation tools may not be able to capture all the intricacies that require interpretation and analysis.

Importance of contract document automation

One of the essential aspects of effective contract management is document automation. Contract document automation streamlines document generation, reducing errors and potential delays in the contract lifecycle. Additionally, automated contract generation tools can integrate with other contract management software and provide a single source of truth for contract management.

Automated sales contracts

Automated sales contracts refer to the sales process that is managed using contract automation tools. Automated sales contract software can help sales teams generate contracts, track sales cycles, and manage agreements with customers.

Automated sales contract tools can help businesses close deals faster, decrease the time needed to approve contracts, and increase collaboration between teams. These tools can also improve accuracy in contract creation, reduce errors, and help businesses manage their sales pipeline effectively. Additionally, automated contract sales tools can integrate with customer relationship management (CRM) software. Consequently, this provides a seamless and efficient process.

Choosing the best contract automation tool

Contract automation tools are essential for streamlining the contract creation, review, and management processes in any organization. However, choosing the right tool requires careful consideration of several factors. In this section, we will discuss how to choose the best contract automation tool.

Compare different contract automation tools

There are various contract automation tools available in the market today, each offering different features and functions. Therefore, comparing and contrasting these tools is crucial to determine the most suitable one for your business needs.

Look for essential features

When choosing a contract automation tool, there are several key features to look out for. These features include the ability to create contracts from scratch, automatic contract review and approval, e-signatures, analytics and reporting, and integration with other business tools. It's also essential to consider factors like security, user-friendliness, and scalability.

Consider various factors

Before choosing a contract maker tool, consider factors such as the organization's needs and the complexity of the contracts. How often will you use the software? How much does it cost? Are there support and training options available? Additionally, evaluate the ease of creating contracts using the software, the availability of templates and customization options, and the tool's integration with other automation tools and platforms.

Generate contracts with ease using B12 

Choosing the right contract automation tool can significantly streamline your organization’s contract processes, saving time and money while improving efficiency. By unlocking the full potential of contract automation, you’ll get better compliance, reduced delays, and increased productivity.

Leverage B12’s contracts and eSignatures functionality to streamline your workflows and stay organized. With B12, you can generate professional contracts that automatically match your branding, complete with your own fonts, colors, and logo. Email them directly from B12 and let clients e-sign in seconds. Plus, you can monitor each contract’s status without having to leave the B12 platform. Sign up for free now!