Why Digital Contracts Close Deals Faster
Legal teams are facing pressure to accomplish more with fewer resources. One of the most effective ways to do so is by reducing the time wasted by your current processes. If you haven’t already done so, switching to digital contracts can help you save a significant amount of time because digital contracts close faster than paper contracts.
Digital contract management tools can help you reduce delays and keep your agreements on track. Keep reading to learn the five major ways digital contracts can reduce the amount of time needed to close a deal.
1. Digital contracts reduce friction
Friction costs businesses money. A friction point is a problem area in a process that causes delays and introduces the potential for failure. Digital contracts close faster by removing these friction points.
There are many places that friction can be found in the traditional contract process, including:
- Contract handovers: Traditional physical contracts are a significant friction point simply because they’re physical objects. Having to hand over a contract to another party before a purchase gives the customer time to reconsider their decision to buy. It also wastes time and therefore money for your Legal team as they try to coordinate the handover.
- Excessive review times before purchases: If someone wants to make a relatively simple purchase, an excessively long contract review process can put them off. If your Legal team needs to help people review these contracts, the process wastes time for everyone involved.
- Complicated eSignature envelopes during checkout flows: eSignature envelopes can force potential clients to jump through hoops just to agree to your terms and conditions. Managing the back end of these complicated envelopes takes time and effort, and each step involved offers another potential friction point.
- Abandoned carts: All of the friction points above lead to another cost if people decide to abandon their carts entirely. Abandoned carts represent purchases that are never made. Overly complicated contracts make it more likely that people will choose to abandon their carts instead of going through with their purchase, costing your organization revenue.
Clickwrap and other well-designed digital contracts can resolve all of these friction points. A clickwrap agreement is a contract that someone agrees to by reading through a set of terms and then clicking a checkbox confirming they agree.
There’s no need for complex eSignature envelopes with a simple clickwrap agreement. Digital contracts of all types also remove the need for contract handovers and complicated review processes. As a result, people are less likely to abandon their carts and cause your organization to lose money. You also save time and payroll lost to inefficient contracting friction points.
2. Digital contracts reduce review time
Most of the time spent on contracts is focused on the review and approval process. Contract processes that aren’t well-organized require in-depth analyses to ensure that they’re legally binding and genuinely accomplish their intended goals. This forces your Legal team to spend more time on every agreement and delay the close of deals in the meantime.
A poorly organized contracting process can fall victim to one of two problems. First, Legal teams may attempt to review every contract, including low-value agreements. As an organization grows, this quickly becomes a time sink because staff can’t focus on their most important deals when they’re overwhelmed with their lower-value but more frequent agreements.
The second potential issue is when a department attempts to personalize contracts that don’t require that level of attention. Personalized agreements are vital for high-value deals, but they aren’t necessary for lower-value contracts like basic NDAs or end-user license agreements. Without standardized contracts, the Legal team needs to create and review every contract from scratch.
Digital contracting makes it easy to resolve both issues. Your department has the opportunity to generate standardized agreements for low-value contracts of all kinds. Depending on each contract’s value, you can choose from clickwrap agreements and other standardized digital contracts to implement the most efficient acceptance method.
Digital contracts also permit public workflows. These contracts are halfway between a standardized contract and a truly personalized agreement. They let the counterparty begin the process by filling in some basic information and choosing their preferred clauses from pre-approved options. As a result, you can manage more contracts with less need to review each change.
Your team will only need to spend time reviewing contracts for which the review process adds value. As such, every deal will close more quickly because your team can focus all their attention on essential agreements. The important deals get dedicated attention in less time, while the low-value contracts close as soon as they’re signed.
3. Digital contracts cut signing delays
After the review and acceptance process, the next step is to sign the contract. The traditional method is literal pen and paper, with both parties signing a physical document. However, that can take up to two weeks because of the need to print and mail contracts back and forth. If documents get lost or damaged, that can take even longer.
The alternative is to use a digitally native contract. This is a contract structured like a standard pen-and-paper document, but it’s intended for entirely digital use. It’s not a scan of a paper contract or a PDF, but rather a genuinely digital document built to be used entirely online. They have features integrated into their structure that allow all the standard contracting processes to happen online.
These contracts entirely remove the need for mailing, printing, scanning, or converting documents at all. Instead, sending and signing can be done online from start to finish. The contract can be sent to the signing party over email, allowing the recipient to immediately sign it. The signing period can be cut down from two weeks to just minutes. Digital contracts cut days of unnecessary wasted time and lead to deals closing faster every time.
4. Digital contracts are more flexible
There’s only one way to sign a pen and paper document. With a physical contract, the signer needs to put pen to paper, as well as travel to your location, scan it, or mail it back to you. That’s a lot of effort, and it can be enough work that your potential clients delay it or choose not to sign the agreement at all.
A digital contract provides significantly more choices. There are three major signing options offered by digital contracting:
- eSignatures: This method is the most similar to pen and paper signing. With eSignatures, the signer types their name into the contract and verifies their identity. An eSignature is excellent for personalized, non-standard agreements because of its similarity to traditional signing processes.
- Embedded signing: An embedded signing process allows an eSignature to take place directly on a website. These signatures allow users to sign standardized contracts while still requiring them to think about what they’re agreeing with. This makes embedded signatures excellent for standardized, mid-value agreements.
- Clickwrap agreements: These types of standardized contracts are the fastest way to gather agreements for low-value contracts while reducing friction. They are a true one-click solution that minimizes the time it takes to close small sales.
This flexibility is vital to encouraging follow-through from contract recipients. The more options you can offer for different contract types, the more likely it is that you’ll find the solution that promotes increased responses. More importantly, you’ll be able to streamline the process by choosing the most efficient option.
5. Digital contracts are mobile-friendly
The modern world is mobile, so contracts should be too. Physical documents are some of the least mobile contracts available because they’re only accessible from a single location. On the other hand, digital contracts can be accessed anywhere. With the right contracting management system, you can present your agreements in a form that can be viewed on desktop and mobile devices alike.
That mobile nature helps you close deals faster. A contract that can be signed from a phone can be signed anywhere. Using a mobile digital contract allows your clients to review and sign agreements the moment they receive them. As such, there’s no waiting until your recipient gets to a desktop computer. Deals can be closed whether your clients are working from home, in an airport, or anywhere else.
When it comes to closing deals, digital contracts close faster than any other solution. These contracts reduce friction during the negotiation process, cut delays during review and signing, and allow people to view and sign contracts no matter where they are. By implementing digital agreements, your Legal department can reduce wasted time and spend more time on the tasks that need it.
Ironclad’s digital contracts can help your Legal team accomplish more and close deals faster. The platform supports digital agreements of all types, from clickwrap agreements to traditionally structured documents. You can learn more about how Ironclad’s digital contracting management system can streamline your contracts by requesting your demo today.
- 1. Digital contracts reduce friction
- 2. Digital contracts reduce review time
- 3. Digital contracts cut signing delays
- 4. Digital contracts are more flexible
- 5. Digital contracts are mobile-friendly
- In summary
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Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.