7 Ways Financial Departments Benefit From A Modern Contract Management System
Finance and procurement go together like peanut butter and jelly. Procurement teams must have both time and funds to complete their tasks while financial departments must control spend and guide money towards the highest-impact activities available. Contract management software like SAP Ariba help finance and procurement work together smoothly while saving everyone a ton of time and money. Here are seven ways a good contract management system can benefit your financial department:
Lower Total Cost of Ownership (TOC)
If there’s one thing that excites a finance pro as much as increasing a company’s revenue, it’s saving a boatload of money. Using a contract management system is a high-impact path to lower TOC vs. a traditional pen, paper, and fax machine system. Between reduced liability costs, on-time contract renewals, salaries that go further thanks to a major speedboost, and data-based insights into suppliers, a proper contract management system can go a long way to reduce costs. As compared to the analog method and other digital contract management systems on the market, SAP Ariba offers more bang for the buck at a lower price point for any small to medium enterprise looking for a robust contract management system.
Mitigate The Risk Of Costly Liability Issues
Many risks are preventable with the right tools. Contract management systems help mitigate risks, effectively saving money, in a variety of ways. First, they reduce contract errors such as unsigned fields or accepting a modified, nonstandard contract without review. Because compliance and performance information is stored within the CMS, it’s also easier to see which suppliers may pose problems for the business in the future by offering shoddy quality products or failing to maintain compliance with governmental agencies.
Stopping these problems from the onset can save massive amounts of money in legal fees as well as reductions due to loss of reputation.
Broadstroke Benefits With E-signatures
E-signatures let suppliers sign their contracts online. This process can save a lot of money compared to mailing back and forth paper materials which can be bulky and expensive, especially in the face of rising mail costs. The e-signature, however, is traceable and secure. Platforms that offer this service such as DocuSign—the software of choice for SAP Ariba contracts—come with other perks too. They walk signers through each step of the signing process, highlighting the field to sign or initial to make sure no spaces are left blank. This reduces fees that could be associated with any legal recourse that arises from an unsigned or improperly-signed contract.
Save Time And Reduce Salary Costs
Perhaps more beneficial, e-signature software reminds signers to complete the task which not only ensures compliance, it saves a ton of money in time procurement doesn’t have to spend to reach out and pester people for signature. The cost associated with procurement and legal professionals can quickly balloon if employees get bogged down in sluggish outdated processes. By providing contract templates and a clause library as well as esignature functionality and dashboards with the most important information, each employee can focus more on high-impact tasks instead of menial, wrote jobs.
Never Miss A Key Date
Especially when underperformance has been an issue, missing a key date to cancel or renew a contract with a supplier can be devastating financially. While it can be incredibly tedious to try to manage all major contract renewal dates using analog methods, a good contract management system can keep everyone on track for success. SAP Ariba offers users a dashboard with upcoming important dates such as contract renewals so there is ample time for research and negotiation that could save a lot of money.
Gain Full Visibility Of The Entire Contract Lifecycle
Optimization is hard when you can’t see everything at play. Contract management software offers financial departments full visibility into the contract management lifecycle making it easier to analyze, strategize, and optimize for the best possible cash flow scenario. With SAP Ariba, the entire set of actions from initiation to renewal are kept in a central database with a variety of other supplier information within a fully-auditable trail.
Analyze Your Best-Value Suppliers
With more information about each individual supplier, finance professionals gain insight into how each supplier plays a role in the organization. Which suppliers bring the most value to the table based on a variety of factors? Where is there room for negotiation? Which suppliers should be replaced as soon as possible. By understanding where value lies within your contracts and suppliers, it’s easier to make wise choices without all the guesswork of papers and pens.
Premikati is a woman-owned business of procurement experts providing best-in-class software to maximize your company’s ROI.
Our award-winning team has a 100% success rate implementing on-time and on-budget, due to our agility, leanness, operational experience, and the ability to tailor the transformation process from C-level to end user. (For more information, visit www.premikati.com)