HOW TO PREVENT REVENUE LEAKAGE WITH CONTRACT LIFECYCLE MANAGEMENT?
As the need for automation is increasing, the demand for Contract Lifecycle Management solutions is also growing. According to a study by IACCM, more than 70% of the international corporations considered contract management as a “major or significant source of operational weakness” and that improvement in the field can lead to better risk management and prevent revenue leakages. People are after faster and more streamlined workflows while maintaining the integrity of the results. Like faulty pipes lead to leakage of water and causing mayhem, similarly faulty organizational processes and inefficiencies can result in revenue leakage, which may amount to a hefty sum of money.
Studies show that organizations on average lose an estimated 9% of annual revenue due to their inability to manage contracts. The most common causes of revenue leakage nowadays are due to missed deadlines, contract plotholes, skipped renewal, and inconsistent workflows. A revenue leak may go unnoticed until it has reached a 5% impact on the overall bottom line of the organization. But, all leaks eventually add up and can create havoc; even a leak as small as 2% means a revenue loss of $1M for an organization earning $50M annually! These reasons are major contributors to why your revenue-producing initiatives falling through the cracks.
While the specific causes of revenue leakage vary from an enterprise to another, they are commonly rooted in a lack of transparency, automation, and accountability for tasks and projects that have a financial impact on an organization.
- Contract Storage and Authoring: Costly mistakes occur newly agreed upon drafts and agreements get lost in old cabinets and drawer. Incorrect data can lead to expensive invoicing, pricing, and renewal errors, and increases compliance risk. These risks increase when only one person is responsible for the drafting.
- Workflow Issues: Invoices that are created and sent but never approved or proceeded are often the result of organizations lacking automated workflows in their processes.
- Client Management: Lack of communication with clients lead to missed opportunities and often a failure to reassign the pipeline and current customers to new representatives. The result is missed renewals, incorrect pricing, and contracts or deals with non-updated information.
- Lost Audit Trails: Pulling data from multiple files and software systems may result in incorrect reporting around terms, timelines, price lines, etc when in urgent need.
- Security: One major issue that a contract management lifecycle faces is the visibility of a contract to certain unwelcome parties or non-authoritative figures, which in turn may lead to losses in organizations that deal with sensitive information.
Contract management solutions like smartContract are simple and advanced full contract lifecycle management systems at the same time with capabilities to fully automate and streamline document and obligation management.
smartContract assists you overcome these challenges by completely taming above-stated reasons; by fully automating and streamlining your contract management lifecycle from Contract Requests, Approvals, Contract Drafting, Negotiations, Contract Executions to Obligation as well as risk management. smartContract is built on a dynamic, flexible and scalable architecture that can replicate your existing business processes and address the needs of your organization of any size or complexity.
- Easy to use: smartContract standardizes and secures contracts easily and quickly using Microsoft Word customized templates with dedicated plug-in for your Legal Team.
- Efficient Collaboration and Authoring: Work quickly and efficiently with all stakeholders through smartContract workspace for contract drafting, reviews, negotiations and execution from a single screen.
- Contract Amendments and Revisions: Online hierarchy based smartContract database allows you to create, capture, store, link and archive all documents, amendments and revisions.
- Dynamic Workflow Engine: Dynamic smartContract workflow engine paves an easy path for contract renewals, approvals, e-signatures for contract execution along with Contract Obligation Management.
- Prompt Alerts and Notifications: smartContract cares about your business as you do, that is why it comes with automated alerts to track and manage contracts, agreements, key milestones, renewals and deadlines along with escalations on non-compliance.
- Security and Authority: As we said security is one of the most essential features to save revenue leakage at all costs, and so smartContract brings you the best in class features to ensure full disclosure. This solution allows only authoritative people with permissions to view and access certain files and contracts.
- E-Signatures: Eliminate the need of multiple contract printouts or signing and approvals; smartContract is equipped digital signature capabilities for approvals via digital platform.
Chances are, if you aren’t properly managing the entire lifecycle of your contract portfolio, you’re leaking revenue. Organizations that successfully and consistently reduce revenue leakage, embrace contract lifecycle management technologies to support the most profitable renewal, pricing, and negotiations that can positively impact your business. Considering how simple it can be to stay on top of your contracts with a solution like smartContract, there is no reason that you can’t start meeting and exceeding your revenue goals through better contract management. Don’t let even the contract lifecycle management cause issues for your business when you can join our family with smartContract today!