contract management Software for Small and Medium-Sized Businesses

A medium-sized company signs dozens of new contracts over the course of a year. Lease agreements, software licenses, supplier agreements, employment contracts. At some point, it’s easy to lose track. A cancellation is forgotten, a subscription renews automatically, an important deadline passes unnoticed. What sounds like a minor oversight costs companies significant sums annually. In this article, you’ll learn what really matters in contract management software for SMEs, which features are crucial, and how to find the right solution for your business.

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Why manage contracts in the company?

Contracts—and especially their management—are an essential part of a well-organized company, as contracts contain important information and obligations. They govern deadlines, costs, and responsibilities—and poor management of these documents can lead to significant disadvantages. Missed termination deadlines can lead to unnecessary expenses due to extended contracts, and misfiled contracts make it difficult to access important information. This results in employees spending a lot of time searching for documents, which delays the processing of urgent requests. Particularly with sensitive contracts, there is also the risk that unauthorized access due to poor management could lead to legal or financial problems.

A structured contract management system, on the other hand, offers clear advantages: Contracts are securely stored and easily accessible, and well-founded analyses make it easier to plan future expenses and revenues. This makes the contract management an indispensable component of Management Risk Controlling (MRC), which helps companies operate more efficiently and securely.

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Which department is responsible for contracts?

Contracts form the backbone of all a company's business activities - they regulate obligations, secure revenue and minimize risks. For this reason, responsibility for contracts cannot be limited to a single person or department. Instead, almost all areas of a company rely on contracts in some way, even if some departments work particularly intensively with them.

The legal department is responsible for drafting, reviewing and negotiating contracts and ensuring that they are legally sound. The sales department manages contracts with customers, while the purchasing department focuses on agreements with suppliers and business partners. The HR department focuses on employment contracts, while the IT department arranges software licenses and other IT-related agreements. The accounting department also uses contracts for invoices and annual financial statements, and the management and controlling departments analyze contract data in order to make well-founded strategic decisions.

This widespread use of contracts demonstrates how essential they are to the company. A well-functioning contract management system helps coordinate the various needs of the departments and ensures that all relevant information is available at all times.

Four inefficient strategies to manage contracts - and the solution

There are four strategies to manage such contracts:

1. management by chaos

Put all current contracts in a pile and write down the deadlines on slips of paper. From time to time, you look for a permanent place to file the documents. And eventually, you realize that this seemingly efficient method of “minimal management” is actually a hidden time-waster.

2. folder parade

Who doesn't know them: the shelves where grey folders stand in rows. All neatly labelled. This has been the preferred management system for decades. It only works as long as you have the time or money to file every contract and regularly go through the folders to check the due dates.

3. "You do it"

You look for a capable trustee and simply send him all the contracts and invoices. Out of sight, out of mind. At the latest when you quickly need some information about the contracts or the trustee asks questions, the disadvantages of this method become apparent. It is also expensive.

4. contract management software

The principle is simple: record all contracts in a database so that all information can be found clearly on one platform. This is, of course, the ideal way. However, you have to bear in mind that you have to enter all the contract data yourself first. That costs quite a lot of time.

But there's another way: A new generation of contract management software is described in the next section.

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An exciting alternative: " contract management " software for small and medium-sized businesses

ContractHero is new. Brilliantly simple. Entering contracts takes very little time. And searching for them takes even less. So it’s just the right solution for busy companies that have better things to do than waste their valuable time on “ contract management .” With ContractHero, you can manage all your contracts centrally in one place—without having to spend hours typing contract details into forms first. Simply upload your contracts. ContractHero analyzes them and extracts all the important information for you: subject matter, contracting parties, agreed-upon costs, deadlines, etc. ContractHero presents this information in a clear, easy-to-read dashboard.

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Manage an overview of all your contracts

ContractHero gives you a complete overview of your contracts. You can search your entire contract inventory by keyword, sort it into categories, sort it, tag it, ... You can also display a list of all due dates. Or list all contracts that expire in the next 2 weeks. Our users find the financial evaluation options particularly exciting: For example, you can sum up sales revenues and contractual obligations across all contracts and graphically display the future cash flow. Of course, ContractHero cannot replace bookkeeping. But it does provide a good overview quickly and easily and also a good feeling of having everything under control.

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Reminder of notice periods

With ContractHero, you’ll never miss a “ notice period ” again. For each contract, you can specify a term and a “ notice period ” and also set a reminder. This way, you’ll be reminded of your expiring contract at the desired time and will never miss a deadline again. You can take action in a timely manner to terminate, renegotiate, or renew the contract.

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Conclusion: Manage contracts with software for SMEs

With ContractHero, you can manage your contracts effortlessly. All you have to do is upload the contracts and ContractHero will take care of entering the essential contract information for you. The contract management software can also remind you of notice periods so that you always have all contracts under control - making it a valuable addition to other digital tools, such as document management software for compliance or internal guidelines.

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