Top 5 Benefits of Contract Automation in 2024

Transitioning to contract automation software could be one of the best technology investments your business makes this year. Why? Automating contract management provides major efficiency gains, cost savings, and other benefits.

In this article, we’ll clearly summarize the top 5 ways your business can benefit from contract automation in 2024:

1. Reduce the time spent drafting new contracts
2. Cut printing, mailing, storage costs
3. Improve customer satisfaction and retention
4. Streamline contract reviews and approvals
5. Digitize archives for easy search and analysis

Let’s look at the details and real-world examples for each of these impactful benefits.

1. Reduce Contract Drafting Time

Manually managing contracts from scratch is incredibly time-consuming. How long does it take your team to draft the average contract?

Experts say even simple, one-page contracts can take several days to finalize. More complex agreements often take weeks of drafting and internal reviews before they’re ready for signatures.

Now imagine if your sales reps could create new contracts in just minutes by pulling pre-approved templates and letting software auto-fill repetitive information.

Contract automation makes this vision a reality through features like:

• Template libraries – Store clause options and pre-configured contract templates that are ready to use for different purposes and customers. This eliminates starting from blank pages.
• Auto-population – The system can pre-populate names, addresses, dates, and terms based on your business rules and data sources. For example, connecting to CRM and ERP automatically inserts relevant client and order details into the contract.
• Guided workflows – Step-by-step wizards let users quickly assemble contracts tailored to each use case.

According to research by Aberdeen Group, best-in-class contract management teams enjoy 36% faster cycle times for creating new contracts. For a company negotiating thousands of deals per year, those add up to major savings.

Automated contracting also reduces bottlenecks in procurement and sales operations. One study found it helps sales teams close deals up to 80% faster. That’s revenue that flows to your bottom line quicker.

2. Avoid Monetary and Environmental Costs

Let’s recap the typical costs of managing paper-based contracts:

• Printing costs – Up to $20 per contract for materials and ink
• Postage costs – Average 55 cents to mail via USPS
• Storage costs – Fees for off-site document archives
• Labor costs – Employees spent searching for physical contracts

Experts estimate enterprises lose over $120 per document due to printing, postage, and manual document handling.

For a company producing tens of thousands of contracts per year, these costs add up quickly. They also represent wasted productivity as employees shuffle through paperwork.

By digitizing the entire contract workflow, automation solutions eliminate these expenses. E-signatures and digital storage remove the need for printing, postage, and filing.

Going paperless also benefits the environment. According to the World Wildlife Fund, eliminating paper contracts reduces water usage, energy consumption, solid waste, and deforestation. It‘s a green technology that helps your operations become more sustainable.

3. Increase Customer Satisfaction

Here’s a common frustration many companies put customers through:

The client receives a printed contract and instructions to sign the document, then postal mail the original copy back to your office for countersignature and records.

This back-and-forth process often takes weeks. The lack of visibility into status also leaves customers in the dark.

Now imagine providing an entirely digital contracting experience:

• Contracts are delivered instantly for e-signature.
• Customers can review and sign the docs from any device.
• You can track signature status in real-time.
• Signed contracts are securely archived digitally.

This convenience, speed, and transparency delights customers and builds lasting relationships.

In one survey, 93% of customers said they were satisfied with paperless contracts versus traditional paper agreements. Simplifying the process wins loyalty.

Another benefit is enabling self-service. With contract automation, you can empower customers to initiate basic contracts like NDAs or SOWs without sales rep involvement. Customers get the speed they demand.

4. Reduce Bureaucracy with Automated Reviews

Before contracts get signed and executed, they require extensive internal reviews to mitigate risk. Stakeholders in finance, compliance, legal, sales ops and more need to scrutinize agreements.

With manual contract reviews, bottlenecks grind progress to a crawl. Contracts get stuck waiting on different desks without clear visibility. This breeds frustration for internal teams and customers alike.

Contract automation introduces rules-driven workflows to streamline reviews, such as:

• Automated routing – Contracts are programmatically sent to required reviewers based on contract type or risks.
• Compliance checks – The platform scans for problems like missing signatures, errors, or non-standard clauses.
• Parallel reviews – Multiple reviewers can inspect contracts simultaneously.
• Audit trails – Every review and approval decision is logged for transparency.

Leading research firm Forrester found that contract automation solutions accelerate approval workflows by over 80%. Your legal and finance teams get contracts turned around faster with less redundant effort.

5. Digitize Archives for Quick Search and Analysis

Quick – how easily can your team locate a signed contract from 6 months ago to address a customer dispute? Can you quickly analyze terms across your contracts with a certain vendor?

If your contract archives consist of cardboard boxes stuffed with paper, the answer is probably no. Digitizing contracts makes critical information accessible.

With contract automation systems, every agreement generates a digital footprint for easier discovery:

• Search – Find contracts in seconds using intuitive search tools.
• Tags – Classify contracts with tags like customer name, deal size, contract type, status, etc.
• OCR – Optical character recognition scans document text for indexing.
• Reporting – Generate reports and dashboards filtered on tags, text, and other attributes.

Having data readily available accelerates audits and discovery requests. It also equips managers to make data-driven decisions based on contract analysis.

The takeaway is clear: Automating contract management saves money, time, and effort while improving agility. To determine the best solution for your needs, consult our guide on the Top Contract Lifecycle Management Software Solutions.

Or have one of our expert advisors provide personalized recommendations:

Contract automation delivers quantifiable benefits to your workflows, productivity, costs, and customer relationships. It‘s a foundational technology for digitally transforming your business in 2024.