Whilst businesses might generate most of their data from business operations, valuable data is created from their contracts. Business contracts are often stored in a folder and the data in a spreadsheet which is updated when stakeholders have questions or if a new contract is created. Whilst this might seem straightforward, it is not suited to the nature of contracts as their values are conditional which means they are not always what they might seem on the surface. This article explores some of the key use cases for contract data and what to look out for to make sure they are being stored and interpreted appropriately.
Realtime snapshots and risk management
Business agreements often contain break clauses which allow either side to terminate the agreement under certain conditions. This can be a probationary period for an employment contract or a trial period in a sales contract. The total values of these contracts might be recorded in a spreadsheet or CRM but won’t necessarily be updated if a break clause is exercised. As a result, a business might overestimate their revenue or payroll from an accounting perspective if the numbers aren’t actualised with the contract’s realtime state. Keeping the spreadsheet or CRM up to date can be a painful process if the termination conditions are difficult to access or if the sales, legal and finance teams don’t have access to the same contract information. A business might also want to know what percentage of their agreements is affected by data protection laws or how the confidentiality terms distribute to manage legal risk and better inform internal policies.
Strategic spend decisions
Having the latest snapshot of your business is critical for making decisions for your business with the complete picture. Accurately measuring revenue when sales contracts have break clauses is important for efficiently allocating budget to other departments. Having an accurate picture of payroll allows you to factor in future increases and to schedule hiring efficiently. The following video demonstrates how you can use Legislate to have the real time snapshot of your business.
Time is one of the biggest contributors to contracts not being entered into. Parties can change their mind and walk away from an agreement whilst they have no legal obligations if it takes too long to create and negotiate. Knowing where your contract is in the signature process is important to make sure it doesn’t get held up. Recording contract creation and signing data and aggregating it allows you to optimise your contract workflow and prevent agreements from falling through.
How can businesses capture their contract data in a seamless way?
The typical format of a contract is a pdf which contributes to the difficulty of extracting key terms from agreements. Any management system built for this format will never capture the full potential of capturing contract data.
Legislate makes it easier for businesses to track the aggregate and distribution values of their contract data at any stage of their contract life cycle by leveraging patented knowledge graph technology. Legislate knows at any time what a contract contains and how terms should be assembled into consistent agreements which are fair and robust. As a result, Legislate automatically extracts all the key contract information and presents it back to business stakeholders in a visual dashboard. Numbers are updated to reflect expiries, early terminations, renewals and increases. Finally, Legislate cuts the administrative time of creating a contract and setting its terms down to minutes which frees up time and energy for running your business and managing the relationship with the other side. If you would like to get started, sign up today or book a demo.