Why using a contract database is useful for the whole company

You can't create tomorrow's company with yesterday's tools*.

If you live in the Paris area, you have probably seen this advertising campaign on your route in July 2022.

In the same way, we don't manage today's company to reach tomorrow's objectives with yesterday's tools.

Far be it from us to pass value judgement on the tools, or lack thereof, dedicated to contracts within your company.

We've been there and we know that sometimes it can take a long time to win.

We know that you often hear that a contract library is not a priority and that you can easily reach your business goals by working in the same way

We know that you are often told that a contract library is not a priority project because it only concerns one department, yours, which is only indirectly involved in achieving the company's objectives.

That's why we've put together an article to help you demonstrate why using a contract library is useful for the entire company.

‍

‍

Contract Library: Definition

‍

Contrathèque comes from the contraction of the words contracts and library.

This term, which does not yet appear in our Larousse dictionaries, is nevertheless very present in our respective daily lives in companies.

A contract library is a library of contracts that meets two objectives: to share contract models and to centralize the archiving of contracts signed by the company.

‍

It is one of the components of contract management software, also known as Contract Lifecycle Management Software.

‍

‍

🗂️ Common needs that can be met by a contract library

• Free up time for legal teams and give autonomy on contracting to your internal clients
• Reduce time spent in negotiation to accelerate the conversion cycle and win new opportunities
• Centralize and pool contractual resources for better monitoring and dissemination of information
• Optimize the tracking of contractual deadlines so that you don't miss any important opportunities or deadlines

‍

‍

Use a contract library to empower the initiation of contracting

‍

"Contracts are legal paperwork. It's administrative. We turn it over to legal and hope the contract gets signed as soon as possible."

For some people, prejudices still hold sway when it comes to contracting.

However, contracting is the most decisive step in a sales cycle. It allows us to transform an opportunity into reality.

‍

A contractualization initiated and an agreement signed is :

• One step closer to achieving the company's business objectives
• One step closer to achieving revenue targets
• A new mission, client to take in charge for your client teams
• One more step towards achieving the individual objectives of your sales representatives
• The possibility for your sales teams to free up time to win new customers

‍

So contracting encompasses a lot of issues with a direct impact on the company's bottom line. So far, we are just stating the obvious. It is still important to set the framework before going on with your arguments.

‍

Using a contract library allows for the empowerment to initiate contracting.

• Take advantage of the window of opportunity: Seize the opportunity quickly
• Free up time for legal teams: They will only be involved in reviewing and possibly negotiating the contract. 
• Secure the drafting of contracts: No untimely changes are possible, only the parameterized fields can be modified. 
• Save time in the drafting of the contract: Connection with the CRM

‍

The beneficiaries are multiple. It can concern the sales and marketing team as well as the general management. Everything will obviously depend on your needs.

‍

👋 Our advice: Take examples of past or future concrete cases and put them in perspective with regard to the different points raised.
This will allow you to embed your arguments in the daily life of the company. Ask your internal customers and their tools to get more visibility on the statistics that interest you (average conversion time, average negotiation time, number of opportunities lost due to lack of contracts sent on time etc...).

‍

‍

Using a contract library allows you to have more visibility on your contracts

‍

Negotiate a contract, sign it, file it in a drawer, execute it. Change offices, move. Need it, don't find it again. This is the vicious circle of a contractualization that still relies on paper archiving.

‍

Yet you and we both know that a contract is not a piece of paper that you sign and put in a drawer never to be used again.

‍

A contract is nothing more than the rules of the game of the relationship you have with your co-contractor. This relationship is made up of obligations, rights, deadlines and milestones. Contractual facts that are far from being static and that you can follow more reliably thanks to an appropriate contract library .

‍

Digitally archiving your contracts in an ingenious way through a classification consistent with your organization is a first step. However, this will not solve the static and unusable aspect of your strategic contract information.

‍

Using a contract library allows you to give more visibility on your contracts.

‍

• Perform effective research: Quickly grasp the mass of information that makes up your contractual inventory to extract the information that can help you resolve a situation or make a decision.

‍

• Better distribution of information: Authorized employees will be able to find the information that interests them or that will allow them to carry out their missions in a few clicks, without asking you.

‍

• Responding to regulatory control requirements: If you operate in a regulated sector of activity, the regulatory authority may ask you to provide information on a regular basis (e.g. ACPR, prudential banking reporting).

‍

• Assistance in negotiating your contracts: This will facilitate the contractual analysis work carried out by your teams. Do we really need to spend time negotiating on this clause? What was the history of the last two years? etc, etc...

‍

‍

👋 Our tip: Scanning and archiving your existing contract inventory is good. Doing it while making your documents usable is better! If you have a stock of several tens or even hundreds of thousands of contracts, manual scanning is clearly not a viable option. Opt for a mass rework using OCR technology that will allow you to exploit the data of your contracts.

‍

‍

Using a contract library allows a better follow-up of your contracts

‍

A contract is nothing more than the rules of the game of the relationship you have with your co-contractor. This relationship is made up of obligations, rights, deadlines and milestones. Contractual facts that are far from being static and that you can follow more reliably thanks to an appropriate contract library .

‍

A well-crafted contract library will provide a reliable follow-up to all parties involved in the contractualization according to their scope. On the contrary, a bad follow-up of the contracts is, not surprisingly, generating financial risks for the company.

‍

• Better execution: By keeping track of contractual obligations and associated late penalties

• Better cash management: By automating invoicing and reminders using the payment due dates of your contracts as triggers

• Better management of services, equipment and licenses: By avoiding contracts for services, equipment or licenses that are automatically renewed even though they are not used by your employees.

• Better retention: By allowing your sales teams or account managers to better accompany the end or renewal of a contract

‍

The metadata filled in manually or automatically will allow you to carry out this follow-up. They can be the subject of reminders or automated actions.

‍

For example, when the payment due date arrives, your contract library connected to your invoicing software will automatically send an invoice to your customer.

‍

For example, 3 months prior to the contract end date or tacit renewal date, your connected contract library will send a notification to the sales team in charge of this account to inform them of the upcoming expiration date.

‍

👋 Our advice: Your company is bound to have one or more contractual histories that they would not want to see repeated. Find out about it, unravel the thread of these cases and make it a case study. This will allow you to ground your arguments in concrete facts and, what's more, in one or more events that could have been avoided.

‍

‍

Using a contract library allows a better follow-up of your contracts

‍

A contract is nothing more than the rules of the game of the relationship you have with your co-contractor. This relationship is made up of obligations, rights, deadlines and milestones. Contractual facts that are far from static and that you can follow in a more reliable way thanks to an appropriate contract library.

‍

A well-crafted contract library will provide a reliable follow-up to all parties involved in the contractualization according to their scope. On the contrary, a bad follow-up of the contracts is, not surprisingly, generating financial risks for the company.

‍

• Better execution: By keeping track of contractual obligations and associated late penalties

• Better cash management: By automating invoicing and reminders using the payment due dates of your contracts as triggers

• Better management of services, equipment and licenses: By avoiding contracts for services, equipment or licenses that are automatically renewed even though they are not used by your employees.

• Better retention: By allowing your sales teams or account managers to better accompany the end or renewal of a contract

‍

The metadata filled in manually or automatically will allow you to carry out this follow-up. They can be the subject of reminders or automated actions.

‍

• For example, when the payment due date arrives, your contract library connected to your invoicing software will automatically send an invoice to your customer.

• For example, 3 months prior to the contract end date or tacit renewal date, your connected contract library will send a notification to the sales team in charge of this account to inform them of the upcoming expiration date.

‍

‍

👋 Our advice: Your company is bound to have one or more contractual histories that they would not want to see repeated. Find out about it, unravel the thread of these cases and make it a case study. This will allow you to ground your arguments in concrete facts and, what's more, in one or more events that could have been avoided.

‍

‍

🤝 Exchange, share to progress

We exchange and help legal ops and legal departments on a daily basis with their projects. Some of them may be in the same industry as you and have already encountered the same issues.
We will put you in touch with the most appropriate person within the Legal Ops community.
Request a Legal Ops Match

‍

‍