What should an adequate approval process look like?
A contract approval process acts as one big sorting centre within the organisation. It collects all types of contracts that enter the organisation, wherever that may be, and puts them on the right track. From the initial contract check, to the final signatory. A high-performing approval process ensures that the signatory can sign each contract with full confidence and the necessary information from other departments in mind. But what are the most important attention points in such a contract process? Read on to discover them here.
Different contracts have different follow-up needs
A thorough approval process should determine how each type of contract is handled in your organisation. A lease or loan contract for a new office will probably follow a different trajectory than a collaboration with a consultant or the contract with the new energy supplier. It is therefore important to work with a system that really knows what a contract is about. It should also be possible to set up a separate flow for certain contracts. For example: contracts up to 20K may be decided or signed by the business unit manager, whereas for contracts from 100K legal must be included in the contract approval.
A document management software (think of Google Drive or SharePoint) is often insufficient for this. An alternative is to print out all contracts and manually forward them internally, but there the error rate rises noticeably and it goes without saying that this is an inefficient, time-consuming activity. A contract management software can offer a simple solution here. The system knows what a contract is and allows you to link the right approval process to the right contract. You easily connect it to a DMS and the necessary people receive a timely notification when approval is required from them.
The approval process must be known internally
The specific processing method for each type of contract must be clear to all your employees or colleagues. The reality is that you cannot fully predict where a contract will enter the organisation. The person responsible for waste collection in one of the offices may have received a proposal for the whole group. What should he or she do with this? At such a moment, there is a growing need for one central contract platform in which all contracts can be accommodated. On this platform, the internal approval processes are set up automatically, so that with a click of a button you can have each contract checked by the right people. Moreover, at the end of the journey, you have a clear overview of everyone's comments, which you can also refer to later.
Know the status of each contract at all times
This also brings us to an aspect that is most often overlooked: overview. Without an overview, management, finance or legal will always miss a piece of the puzzle. You cannot underestimate the convenience of a solution that gives you an overview at any time of which contracts are circulating within the organisation for approval. Overview also means that you can find out in retrospect what comments were made on a contract when it was signed four years ago. It also makes it easier for you to request urgent contracts from the right person immediately or exactly know the status of a contract at any given time.
A good start is only half the work
Last but certainly not least, you should always know what to do with a contract once it has been signed. It is pointless to set up an approval procedure if you cannot find the signed contract later or if the agreements in the contract are not complied with. To really deliver value, you should link the approval process to the follow-up tasks and agreements of a contract. Would you like more information on how to efficiently follow up contracts and compliance? Feel free to book a meeting with one of our contract experts. They will look at your specific contract needs and provide you with the appropriate solution.
Do you want to know how to start setting up an approval process in your organisation? And how you can make that process run smoothly? Download the complete guide and get started with more secure and efficient approval flows.