Summary

• 6 min read

Generating contracts manually is slow and error-prone. Learn how contract automation increases accuracy and efficiency.

Index

• What is Contract Automation?
• What Problems Does Contract Automation Solve?
• Who Benefits from Contract Automation?
• How to Automate Contracts
• Automate Contracts with Asipps

When you generate a contract, precision is key. Without precise language, your organization may be legally exposed and liable for terms it did not intend to accept.

However, when you need to generate contracts at scale, efficiency becomes a factor that threatens precision if not done correctly. Generating contracts more quickly means you can process more agreements in the same time, which is good for business. But rushing to manually generate a contract can open the process to human error and negate any prior work done to ensure accuracy.

The key to generating your contracts with accuracy and efficiency is automation. This technology-based approach can streamline and simplify the creation, management, and execution of contracts without the risk of human error.

What is Contract Automation?

Contract automation is the process of using specific software to handle the creation, negotiation, execution, and management of contracts. Instead of relying on slow, manual contract workflows, companies leverage contract automation to streamline these processes, reduce errors, improve collaboration, and ensure compliance.

Why is Contract Automation Beneficial for Organizations?

Contract automation offers a multitude of advantages that can significantly impact an organization’s efficiency, productivity, and outcomes. By minimizing manual intervention and human error, contract automation enables businesses to:

• Save time and resources. Automated contract processes eliminate the need for repetitive, time-consuming tasks, allowing employees to focus on high-value activities that drive business growth.
• Reduce errors. Manual contract management is often susceptible to mistakes whose resolution can be costly. Automation ensures consistency and accuracy by applying predefined rules and eliminating the risk of human error.
• Improve collaboration. With contract automation software, teams can collaborate seamlessly in real-time, regardless of their geographical location. This enhances communication and accelerates decision-making.

What Problems Does Contract Automation Solve?

Contract automation addresses several common organizational challenges:

• Long approval cycles. Manual approval processes can cause delays and missed opportunities. Automation shortens approval cycles by automatically routing contracts to the next signer, ensuring signatures are obtained as quickly as possible.
• Compliance risks. It’s essential to ensure compliance with legal and regulatory standards. Contract automation helps maintain consistency and regulatory compliance throughout the contract lifecycle through standardized and pre-approved clauses and AI-based risk analysis.
• Lack of visibility. Manually tracking contracts often results in a lack of visibility into the states and conditions of contracts. Contract automation provides a centralized repository that facilitates monitoring what a contract contains or where it stands in the signing process, all in real-time.

Who Benefits from Contract Automation?

Contract automation has significant advantages for any department that regularly needs to send or sign contracts.

Sales

Contract automation changes the game for sales teams, revolutionizing how they close deals and generate revenue. By automating contract processes, sales professionals can speed up the entire sales cycle, from proposal to contract execution.

Automated workflows streamline the creation, negotiation, and approval of contracts, reducing bottlenecks and shortening the time needed to close deals, while standardized contract templates and predefined clauses ensure message consistency and legal compliance.

Human Resources

Contract automation transforms how HR teams manage essential documents such as employment agreements, non-disclosure agreements, and other HR-related contracts, ensuring a smooth onboarding and employment experience.

HR professionals can streamline the onboarding process by generating employment agreements, benefits documentation, and other essential HR contracts. This ensures a consistent and organized onboarding experience for new employees. HR teams can also implement uniform HR policies with automated contract templates that minimize the risk of legal disputes and help maintain a solid legal basis for HR-related agreements.

Legal

For the Legal department, contract automation is a strategic tool that optimizes contract management and frees up valuable legal resources. Contract automation software facilitates automated workflows for contract review and approval, allowing legal teams to quickly review contracts, identify potential risks, and ensure contracts meet legal standards. Automation enforces the use of standardized contract language and predefined clauses, ensuring contract consistency and reducing the likelihood of ambiguous terms or legal disputes.

Finance

Contract automation helps the finance department manage financial agreements, payment terms, and billing cycles. Contract automation software streamlines the billing process by automatically generating invoices based on contract terms and milestones, helping reduce billing errors, eliminate payment delays, and improve cash flow management.

Automated compliance checks ensure that financial agreements meet regulatory requirements and internal controls, flagging potential issues and ensuring that financial contracts adhere to legal and regulatory standards.

Property and Facilities Management

In property and facilities management, contract automation simplifies the leasing process. Property managers can create customized contract templates that incorporate specific conditions for different types of properties and efficiently add new tenants. They can also leverage automated tracking of rent payments and reminders to ensure payments are received on time. Property managers can set up automatic reminders for tenants, reducing the likelihood of late payments and penalties.

IT and Technology

For IT departments, contract automation is invaluable for managing software license agreements, as it tracks license usage, ensures compliance with licensing terms, and avoids unexpected software audits and penalties.

It also helps manage service level agreements (SLAs), allowing teams to monitor SLA metrics in real-time and automatically trigger alerts when service thresholds are exceeded. This way, IT teams can pinpoint the source of issues and take corrective actions to avoid future breaches.