- 15 min read
- Nia balbo
Introduction
“What is this contract costing us?” “Are we getting enough revenue in to afford building out this team?” “Where has this $100,000 gone?!”
These are all phrases that come out of Finance as they work to protect your business’s bottom line. (If they haven’t said them aloud, trust us, they’ve said them in their heads.)
But when offered new tech tools that aim to improve operations and day-to-day tasks, there’s another phrase that seems to be standard: “Another solution to pay for?”
While it may be easy to write off some solutions as more spend, that’s not the case with CLM tools. With the efficiency and accuracy contract lifecycle management delivers, these platforms are investments that pay for themselves in spades—especially for finance teams.
Keep reading to see how CLM solutions make a difference for finance teams and how they can boost financial management across your enterprise.
On average, enterprises lose 45 minutes locating a contract and 84 minutes looking for the relevant section or language – a total of more than two hours – before they can analyze or apply the information.
Some Numbers for Thought
Not to add to the hundreds of numbers you look at every day, but these are some important figures that need to be shared.
$7,000: the cost of creating an average contract
$50,000: the cost of creating a complex contract.
$6,900: the cost of reviewing a low-complexity contract
61%: the percentage of CFOs planning on using GenAI to improve performance over the next year.
What does that tell us? Enterprise finance leaders are recognizing the monetary impact of contracting. And what’s more, they’re looking to improve how things are done and drive cost optimization.
A View of Finance Without Contract Management
A day in the life of a finance professional without CLM is a day of risk and guessing games.
Other teams store documents in different places, so finance teams have little visibility into pricing and payment details locked in current contracts. That makes it impossible for them to accurately forecast revenue streams. If they’re able to at all, there are a lot of inaccuracies.
The manual review of financial terms takes much longer than anticipated, which leads to bottlenecks and more mistakes as they try to speed things along. This increases financial risk as time goes on.
Validating invoices and establishing payment processes by hand almost always results in late or accidental payments. As those errors continue, your supplier relationships become strained, and you lose contract value.
All in all, contract management is something that finance teams sometimes don’t realize they need and would never want to lose once they have it.
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What Finance Needs in a CLM
Finance has a few needs that your chosen CLM should deliver in order to make all the problems we mentioned above disappear.
Visibility
Your Finance team needs to be able to see every financial contract data point in every contract across your entire portfolio. This includes financial obligations, service levels, rate cards, and pricing.
Only once they have contract visibility into the terms that impact your enterprise’s revenue streams can they accurately forecast and budget for the future.
Risk Controls
Finance needs to be able to partner with Legal to ensure that the language used in agreements maximizes contract compliance and minimizes value leakage.
They also need to trust that every contract moving forward includes that language to continuously build their risk management strategy.
Automation
Finance spends a large bulk of their time manually validating invoices and tracking enterprise spend. They need ways to improve contract automation and reduce that overhead.
While many teams would think that another finance-specific tool might be the solution here, CLM solutions actually get the job done much more efficiently.
How CLM Boosts Financial Management
Sure, contract lifecycle management platforms offer a big help to Legal and Legal Ops.
However, enterprise finance teams can actually leverage the same capabilities to make their own lives even easier.
1. House Contracts in One Place
Forget the days of having to email separate departments and search through half a dozen systems to find a contract to reference.
CLM platforms let you establish a single repository that houses your entire business’ contract portfolio. You can find any agreement (or data points) you need right there.
Plus, with AI-powered conversational search, you simply tell the platform what you’re looking for and get results in seconds.
2. Connect Your Financial Strategy and Contracts
Don’t waste time and effort guessing if the financial terms within your contracts match the strategy you set out for the business.
Leverage visual dashboards and solution integrations to make clear connections between cash-impacting terms and your financial plan.
3. Automate Contract Review Tasks
Rely on contract AI to automatically analyze and redline your agreements to identify deviating terms and ensure that you have the proper risk controls in place to reduce risk and protect your business.
4. Monitor Contract Obligations
Get real-time insight into vendor performance to quickly ensure suppliers are meeting service levels. Use that data to validate invoices and maintain strong contract value.
5. Get Automatic Renewal Alerts
Never make an accidental payment again. Set alerts and get automatic reminders of contract renewal dates so you’re only spending as intended.
Protecting Your Bottom Line
Here are some more numbers for thought: 60% faster contract review. 57% faster deal closure. 12% less spend leakage.
Using Sirion’s AI-native CLM platform, you can improve forecast accuracy, reduce value leakage, and eliminate wasted spend, protecting your company’s revenue.
See the difference Sirion makes today.
Additional Resources
When to Walk Away from a Contract Negotiation: 6 Signs
What Is Contract Value Leakage And How To Prevent It
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