Effective contract management is the key to success in today’s fast-paced business environment. Software for contract lifecycle management, or CLM, has completely changed how businesses manage contracts from creation through execution and beyond. Contract templates are the foundation of standardized agreements that fuel business operations.
What are Contract Templates?
Contract templates are pre-designed documents that outline the terms and conditions of a legal agreement between two or more parties. They contain standardized language and clauses that can be modified to suit the specific needs of the parties involved.
Legal contract templates are commonly used for various agreements, such as rental agreements, non-disclosure agreements, employment contracts, sales contracts, service agreements, license agreements, and partnership agreements.
A contract template provides a framework for drafting a contract without the need to start from scratch. Contract Lifecycle Management or CLM software provides businesses with pre-defined contract agreement templates, along with other features that make contract drafting simpler and more efficient.
Drawbacks of Managing Contracts on Excel Sheets
For businesses, there are several disadvantages to creating contracts without contract templates:
- Inconsistency: The language, formatting, and terminology used in contracts are more likely to be inconsistent when no standard contract templates exist. This discrepancy may cause misunderstandings, arguments, and higher legal concerns for the company.
- Time-Consuming: Drafting new contracts for every transaction or agreement is time-consuming. Without the assistance of pre-approved templates, drafting, reviewing, and finalizing contracts takes a substantial amount of time and resources.
- Increased Errors: Drafting contracts by hand, without templates, raises the risk of mistakes like omitted clauses and misplaced terminology. These mistakes may lead to financial losses, legal problems, and reputational harm for the company.
- Legal Risks: Without the help of standardized contract templates, companies run the risk of unintentionally leaving out important terms or neglecting to take necessary legal actions. This puts the company at risk for legal issues such as contract violations, regulatory non-compliance, and possible lawsuits.
- Inefficiency: Drafting contracts without templates frequently results in pointless steps and duplicate labor. For every contract, you have to start from scratch, which causes inefficiencies and delays in the creation and implementation of contracts.
- Difficulty in Scaling: The absence of standardized templates becomes worse when companies expand and take on additional contracts. Without templates, managing contract production becomes more difficult.
How is CLM Better Than Excel for Managing Your Contracts?
Here’s a quick comparison of Contract templates on CLM and Excel-based contract creation and management.
| CLM Contract Templates | Excel Sheets for Contract Creation | |
| Template Library | Offers a centralized library of categorized and easily accessible pre-approved contract templates | Lacks a centralized template library, requiring users to create and manage templates manually. |
| Customization Options | Give users the ability to fully customize contract templates, enabling them to alter sections, conditions, and clauses to meet their needs | Users have to manually edit templates within Excel cells, leading to potential formatting errors and inconsistencies |
| Dynamic Fields | Includes dynamic fields within for automatic population of relevant information, such as party names, dates, and financial terms. | Lacks dynamic field capabilities, which forces users to enter data into Excel cells manually and raises the possibility of mistakes and omissions. |
| Version Control | Maintains version control of contract templates, tracking changes and revisions and ensuring that users always have access to the latest version. | Lacks robust version control mechanisms, making it difficult to track changes and identify the most up-to-date version of contract templates. |
How Do Contract Templates Simplify Your Contract Generation Workflow?
Contract templates simplify contract workflows in several ways, including:
- Instant Contract Authoring: Contract templates streamline and expedite the contract drafting process, allowing users to generate agreements more quickly. With a pre-defined template in place, users can generate contracts with less manual input and quick turnaround time.
- Faster Review and Approval: When organizations use CLM software with contract templates, contracts can undergo the review and approval stages faster than conventional methods. Standardizing contract forms and automating contract review operations can reduce approval process bottlenecks and expedite the contract lifecycle.
- Consistency and Standardization: Contract templates ensure consistency and standardization across all contracts created within an organization. Employing pre-approved templates with standard language, structure, and clauses helps organizations keep their contract agreements uniform and reduce mistakes and inconsistencies.
- Compliance and Risk Management: By incorporating relevant language/terminology and clauses, businesses can maintain compliance with regulatory requirements and industry standards. This proactive approach lowers the risk of penalties and reputational damage.
- Reduced Dependency: Contract templates reduce a business’s reliance on legal departments and external legal counsel for every contract it creates. By enabling business users to draft contracts instantly, templates free up legal resources for more strategic activities.
- Enhanced Contracting Efficiency: Templates simplify the contract drafting process by removing the requirement to create contracts from scratch. Instead of starting with a blank document, users can save time and effort by using pre-approved templates as a base and tweaking them to match their specific requirements.
- Scalability: Agreement templates allow companies to create and manage a large volume of contracts efficiently. CLM software equipped with a contract template library enables organizations to scale their contract workflows without sacrificing quality or compliance.
Expedite Contract Creation With SignDesk’s CLM Software
Contract templates serve as the cornerstone of efficient and effective contract management within any organization. These templates guarantee uniformity throughout all agreements, expedite the contracting process, and lower errors by offering standard structures for contract creation.
By leveraging Contr.act – SignDesk’s CLM solution, you can:
- Utilize the centralized library of pre-approved, customizable templates for common agreements, eliminating the need for drafting from scratch.
- Reduce the risk of errors and inconsistencies with standardized templates.
- Free up valuable time and resources previously spent on manual contract drafting, allowing your team to focus on core business activities.
SignDesk empowers you to close deals faster, minimize errors, and achieve a new level of efficiency in contract automation and creation. Schedule a free demo today to learn more about smart contract management.
