What is Contract Workflow? Benefits of Automating Approvals

Think about planning a group trip. You’d need everyone to agree on dates, destinations, and budgets—but doing it over endless text threads can get chaotic fast. Now imagine a tool that organizes everyone’s input, keeps track of decisions, and nudges people when it’s their turn to respond. That’s essentially what a contract workflow does, but for business agreements.

Managing contracts doesn’t have to feel like herding cats. Automating approvals makes the process smoother, faster, and way less stressful. It cuts down on errors, keeps everyone in the loop, and helps make sure nothing important slips through the cracks.

In this post, we’ll unpack what contract workflows are, explain how automation can make a huge difference, and give you a straightforward guide to get started. By the end, you’ll see how a few simple changes can transform the way you manage contracts.

Understanding Contract Workflow

Contract workflow is a clear set of steps for creating, negotiating, approving, signing, and managing contracts in a company. It covers all parts of a contract’s life, from starting to renewing or ending it. A strong contract workflow shows the roles and duties of everyone involved. This helps them work together smoothly and reduces delays. This organized method helps businesses improve their contract work, lower risks, and follow legal and company rules.

Defining Contract Workflow and Its Importance

Contract workflow, also known as contract lifecycle management (CLM), is a way to manage contracts from start to finish. It shows all the steps needed, makes expectations clear for everyone involved, and sets accountability for each phase. The legal team, sales, procurement, and other departments all gain from having a clear workflow.

A strong contract workflow is important for many reasons. First, it makes sure contracts are legally correct and helps to reduce mistakes. Second, it speeds up the approval process, which means business can move faster. Finally, it helps keep everything in line by using standard practices for contract management and keeping a record for audits.

The Basic Components of Contract Approval Workflow

A typical contract workflow starts with contract creation. This step involves writing and discussing the terms. Once the first draft is done, it goes through several reviews and approvals. This often requires help from legal advisors and important people involved.

The contract management process includes safely storing and organizing all contracts. It keeps an eye on key dates, like renewal deadlines or important milestones. This helps to make sure actions are taken on time.

Finally, the workflow deals with contract termination or renewal. It makes sure proper steps are taken. Each part is important for keeping a smooth and legally correct contract management system.

Related Article: How to Simplify Contract Approvals? A Comprehensive Guide

Step-by-Step Guide to Automating Your Contract Workflow

Automating your contract management workflow can provide many benefits. It can lessen the manual work you do, reduce mistakes, and make approvals easier. Let’s look at how to move from a slow, manual process to a faster, automated one.

This simple guide will help you understand how to set up automation. It will show you how to do it in a way that fits your business operations. This will help create a more efficient contract management system.

Step 1: Mapping Out Your Contract Process

Before you start with automation, it is important to know your current contract management workflow. This means looking at every step in your process, from beginning a contract to drafting, negotiating, approving, executing, and storing it.

First, check your current manual process. Write down each step and find any spots where things slow down or take too long. Think about who handles each task, how much time it usually takes, and what problems come up.

Knowing your current workflow clearly will show you where automation can make the biggest difference. Making your business operations smoother starts with finding ways to improve your existing process.

Step 2: Selecting Contract Management Software

Choosing the right contract management software is very important for automating your contract workflow. There are many options out there. Each one has different features and tools. The key is to select a choice that fits your business needs and budget.

When you check out contract management software, think about these things: how easy it is to use, how it works with other systems, its reporting and analytics abilities, customization options, and its security features. Look for a contract management system that has strong automation features, like workflow customization, automatic approvals, and reminders.

Using the right software can save your team valuable time. It can also make your contract management process much more efficient.

Step 3: Configuring Your Automation Workflows

Once you pick your contract management software, you should set up your automation workflows. This means using the software’s tools to show all the steps in your contract process and decide how to automate them.

For instance, you can create automated workflows for routing contracts for approval. You can base this on rules like the contract value or type. Also, workflow automation can send reminders for key dates, keep track of contract deadlines, and inform important people about changes.

Good contract workflow automation software like Volody helps cut down on manual work, lowers the chance of human error, and makes the whole process more efficient.

Step 4: Integrating eSignatures for Faster Approval

Integrating electronic signatures into your contract workflow can help speed up the approval process. You no longer need to print, sign, and scan documents. With eSignatures, parties can sign from anywhere.

This not only makes the signing process faster but also cuts the need for physical storage. It helps to reduce the risk of losing or misplacing documents. With eSignature integration, the whole approval workflow goes digital. This way, stakeholders can quickly review and approve contracts.

Using eSignatures in your contract management system boosts security and makes it easier to access contracts. It also supports a more sustainable, paperless contracting process.

Step 5: Training Team Members on the New System

Introducing a new contract management system and automated workflows means you need to train your team members. Good training helps everything go smoothly. It also allows your team to make the most out of automation.

Start by giving clear instructions and guides on how to use the new software and navigate the automated workflows. Hold practical training sessions to help your team learn about the system’s features. Answer any questions they have and offer support during the first phase of using the new system.

Good training and change management are key for success. When you invest in training, you help your team use the new tools better and improve contract management processes.

Related Article: How to Automate Approval Workflow in Salesforce?

Key Benefits of Automating Contract Approvals

By automating contract approvals, businesses can see big advantages. These benefits affect their bottom line, improve efficiency, and help with compliance. Let’s look at how digital changes in contract management can make workflows better and more productive.

When you automate key parts of your contract management process, you save time and resources. It also reduces risks and helps with better decision-making.

Reducing Errors and Increasing Efficiency

One big benefit of automating contract approvals is that it greatly lowers human error. When done by hand, mistakes can happen. For example, people might miss deadlines or forget important details. Sometimes contracts may even be sent to the wrong people.

Automated workflows reduce these problems. They make sure contracts follow set rules and steps during the approval process. This helps improve accuracy and boosts efficiency. By cutting down on manual tasks and making approvals easier, automation helps your team use their valuable time on more important projects.

Enhancing Compliance and Auditability

Automated contract approvals are very important for improving contract compliance. With set workflows and automatic reminders, businesses can make sure that all contracts follow internal rules and legal requirements.

Also, automation builds a clear audit trail. It keeps track of every step in the approval process. This detailed record is very helpful during audits, as it shows proof of compliance and makes it easy to access past contract information.

By making the approval process the same every time and keeping a clear audit trail, automation helps strengthen compliance efforts. It also helps reduce the chances of legal disputes or penalties.

Streamlining Contract Approval Times

Lengthy approval times can slow down business transactions and hurt productivity. Automating your contract approval workflow makes the process faster. This way, you get quicker approvals without losing compliance or accuracy.

With automated routing and notifications, contracts reach the right people for review and approval without delay. This stops problems from manual handovers, lost emails, or finding the right approvers.

By reducing hold-ups and speeding up the approval process, automation helps businesses close deals more quickly, improve their operational efficiency, and enhance business processes.

Related Article: How to Automate Approval Workflow?

Addressing Common Challenges in Workflow Automation

The benefits of automation are many. However, putting new systems in place can bring challenges. Tackling these issues ahead of time will make the change easier. It will also help you gain the most from automated contract workflows.

Getting past early obstacles and accepting change are important steps. They can help you achieve all the good things that automation has to offer.

Overcoming Initial Setup Complexities

Setting up a new contract management system and creating automated workflows can feel tough at first. Companies might run into problems when trying to connect the software with their current systems. They may also struggle with moving contract data or adjusting workflows to fit their needs.

It’s important to work with skilled project managers or implementation experts. They can help you with the process and make sure everything goes smoothly. Use their knowledge to build effective workflows, organize your contract data properly, and solve any technical issues that come up.

With expert help and careful planning, businesses can get past the early challenges. This will help them achieve successful automation.

Navigating Change Management Among Teams

Implementing a new contract management system can bring a lot of changes. Team members need to adjust to new processes and software. It’s common for people to resist these changes. Some may feel unsure about leaving their old methods. Others may not have enough training, which can slow down the use of automation.

To help with this, it is important to tell your business teams about the good things that automation will bring. Offer thorough training on how to use the new system. Make sure to listen to any worries they may have. Highlight how automation can make their jobs easier and help them avoid mistakes. It will also give them a clearer view of contract data.

Creating a friendly environment where people can talk openly is key. It helps when you ask for feedback and give support along the way. This way, businesses can manage changes better and help everyone get used to automation.

Related Article: How to Simplify Contract Review with AI? Comprehensive Guide

Using Volody to Automate Contract Workflows

Volody offers a powerful and user-friendly solution for businesses looking to streamline their contract workflows through automation. Volody’s platform provides a centralized hub for managing the entire contract lifecycle, from creation to execution and beyond.

Volody helps automate contract approval and workflow processes by streamlining the entire contract management process. It eliminates the need for filing cabinets and manual contract workflows, reducing the risk of errors from manual data entry. With Volody, businesses can manage large volumes of contracts, including vendor contracts and legal contracts, more efficiently.

By automating contract review and approval, Volody speeds up contract turnaround times. It ensures that standard terms and the scope of work are consistent across contracts, while reducing legal risks. The right contract workflow is essential to improving efficiency, allowing legal teams to focus on higher-value work instead of repetitive tasks.

At various stages, Volody provides clear steps for contract management, helping ensure that each contract follows best practices. From reviewing templates to storing contracts in a secure contract repository, Volody supports legal advice and ensures business relationships are supported by clear, well-managed agreements. Whether handling a series of steps in the contract workflow process or reviewing a specific type of contract, Volody automates key stages, including contract approval and document filing.

With Volody, businesses can eliminate manual processes, reduce errors, and improve contract visibility, making it a top choice for contract workflow automation.

Related Article: Top 10 Contract Management Software: Best CLM Tools in 2024

Conclusion

In conclusion, automating contract workflows can change how you handle approvals. It helps to cut down on mistakes, keeps everything in check with rules, and makes getting contracts approved faster. When you use automation, you can make work easier, improve how your team operates, and increase how much you can do overall. It’s important to tackle setup problems and manage team changes to make automated workflows work well.

Think about using tools like Volody to make your contract management smoother and better. Embracing automation can help you get the most out of your organization’s contract workflow management. If you want to improve your contract approval system, think about adding automation software. This can give you a smoother and more efficient workflow experience.

Frequently Asked Questions

What is the first step in automating contract workflows?

The first step is to look closely at your current contract process. You should write down each step of your manual process. This will help you see places where automation can make your contract management workflow better.

How does automation impact contract approval times?

Automation makes the contract approval workflow easier. It sends contracts in an organized way, gives automatic reminders, and removes manual tasks. This helps to cut down contract approval times. As a result, the whole process becomes quicker and more efficient.

Can small businesses benefit from contract workflow automation?

Absolutely, small businesses can really gain a lot from contract workflow automation. It helps them handle contracts better, even with fewer resources. This setup can also reduce mistakes. Ultimately, it can protect their total revenue by lowering risks.