As the complexity of business-to-business contracts continues to grow, it’s more important than ever for organizations to hone their processes by improving contracting accuracy and speed. Easier said than done, right?
Traditionally, contract reviewers were expected to dissect contracts with a fine-tooth comb, spend hours identifying potential provisions that could become damaging, and work through revisions manually. That’s how contracts have been signed for years, but here’s the good news — it doesn’t have to be that way any longer.
There are several reasons why this established way of doing things is no longer viable. From hours lost manually reviewing contracts to missed stipulations that come at the most inopportune times, it’s time for a different approach to contracting that helps you limit contract risk and improve efficiency.
Given the complexity of contracting, contract reviewers need to be abreast of all the moving parts associated with contract evaluation before making a final decision. However, when it comes to balancing risk and speed, there are a number of hurdles that in-house teams must be wary of.
Your primary directive is to protect your organization, and as such, you have to ensure the risk you take on behalf of the company matches their profile and requirements, usually captured in a playbook drafted and approved by the company's legal department. From opaque language that ultimately favors the vendor to overpriced products and services that you have no way to negotiate, there are a number of risks to identify before it’s too late. It's only prudent that you take the time to weigh the types of risks you will be exposing your organization to, should you approve the contract.
Signing a risky contract can be the start of multiple problems for both you, as the contract reviewer, and the organization in its entirety. Contract screening is an essential process that shields your organization from many traps and loopholes that could be present in B2B agreements.
While this due diligence is crucial and necessary, it comes at the cost of speed. Your potential partner may want to move quicker than your review process allows, or your organization may not have the internal bandwidth to meticulously review every contract.
The longer the contracting process takes, the more time a deal has to fall apart. Add to that the cost of time and the human resources involved, and it’s easy to see just how burdensome lengthy contract reviews can be.
As the person tasked with reviewing and negotiating contracts for your organization, you need to find a way to intensively and effectively examine the contract, while also reducing the time it takes your organization to finalize agreements.
The Debut of Automated Screening with Contract AI
The evolution of contract AI signifies that you can now set aside the risks associated with contract screening. What's more, you get to save on workforce and time. The potential of making such a move puts you in great standing in your organization.
Establish a Base: Build a playbook of terms that are specific to you and your organization's needs, allowing AI to learn about your company and its desires throughout the contract review process.
Review Contracts: Once your virtual playbook is ready, the software can begin analyzing incoming third-party contracts. Combined with a quality-control review from a professional, this leads to contract reviews with 99% accuracy as to whether your defined criteria have been met.
Receive Reports: You will receive reports in a user-friendly format, with citations to back them up.
Route Contracts Accordingly: The software-assisted review will give you information at a glance so you can quickly decide where to send the contract next. If a contract is fair, you can sign it immediately. For those that are flagged as risky, you know to begin the negotiation process.
Negotiate Contracts: When looking to engage the vendors, you will have a list of the offensive provisions and a report on what the competition has on offer.
It's Time to Join theContract AI Evolution
Now's the time to do away with all the risks associated with contract screening. While it is a vital process, you can now benefit from having AI-enabled tools working on your behalf. From long-term organizational savings to the avoidance of career-defining mistakes, this is a necessary step for the industry.
TermScout allows you to quickly compare any third-party contracts you receive to your playbook on contract screening, ultimately identifying risky contracts before they damage you and your reputation. Get started now by learning how TermScout works.