E-contracting: what it is and why businesses need it

Contracts are the backbone of any business. They enable all of a company’s external processes. As a business grows and scales, contracting becomes an increasingly complex system. Consequently, it becomes more difficult for business managers to control it.

To simplify this process, many companies today sign agreements in e-form. Here we find out what benefits e-contracting brings to business and who in companies uses it.

What is e-contracting?

E-contracting means creating contracts through the use of electronic services. Such services can be used at single stages of the document workflow (e.g. signing a contract using a qualified electronic signature) or they can be applied as comprehensive digital solutions that accompany all stages of the contracting process – from creation to signing, and even beyond to the decision to prolong or terminate the agreement.

Today, e-contracting is used in many different areas of a company’s operations. Here are some of the most common types of contracts and other documents that are signed electronically by employees in different departments:

Benefits of e-contracts for business

Electronic services optimize most processes in the contracting system. As a result, companies reduce costs and speed up the receipt of funds.

Let’s take a closer look at the main benefits of e-contracting for businesses.

Speeding up the contracting process. A common problem companies face when signing contracts is the long cycle time involved in negotiating, amending, and finally signing the contract by all parties involved in the process. Legal departments spend a lot of time negotiating contract amendments. This process slows down even more when approvals are made via e-mail and contract versions are sent in attachments. It also takes a lot of time to verify signatures. Electronic contracting services allow several people to work on a document simultaneously. This significantly reduces the time for approval and signing.

Reduction of the workload of employees. Large companies use templates of standard contracts when working with small counterparties. The option of downloading templates is available in e-document workflow services. In the templates, the seller can choose the details and subject of the agreement, and the counterparty only needs to enter the bank details. This simplifies the work of legal departments, as the approval of agreements is automated. The counterparty does not have the technical ability to make changes to the template, so lawyers can be confident that the document is correct.

Version control. Electronic contracts are kept in cloud storage. All participants in the contracting process have access to them and can propose amendments and additions, track edits made, and add supporting documents. Due to this, the process of creating and approving contracts is transparent for all the participants of the process.

Safety. Traditional contracting involves many risks. Paper contracts can be lost on dispatch, stolen or forged. E-document workflow services protect contracts from unauthorized access and forgery.

How e-document workflow services can help you to establish a contracting process

There is no one-size-fits-all answer to how best to manage the process of creating and signing contracts. The key, however, is to understand how the contracting process works. It consists of the following steps:

• сontract creation and negotiation;
• signing;
• storing.

E-document workflow services optimize processes related to the conclusion of contracts at every stage. Let’s look at how this works in Vchasno.

Creating a contract

Companies’ employees spend a lot of time negotiating contract details with counterparties. The routing function in Vchasno.ODE helps efficiently organize work on the contract. The service automatically assigns which employees will negotiate the contract and in what sequence. This greatly speeds up the approval process.

Version approval

It is important for company employees to keep track of updates to the document in order to send the final version to the counterparty. In e-contracting services, they download versions of the agreement and negotiate them with counterparties before signing.

We plan to expand the functionality related to version approvals in the Vchasno.ODE service in the near future. All processes (proposing amendments, making edits and additions to contracts) will run in a single service. The company employee responsible for the conclusion of the contract will be able to view all versions and add new ones. He will be able to track progress and adherence to deadlines. Thanks to configured routing, he will be able to see at what stage difficulties arise and contribute to their solution in a timely manner.

Signing

In Vchasno.ODE, the parties sign contracts using electronic signatures. The service provides several ways for signing: Diia.Signature, Vchasno.KEP, digital signatures obtained from any qualified provider of electronic trust services of Ukraine.

Using Vchasno.KEP signature provides the best customer experience. It is part of the Vchasno ecosystem of services, so the occurrence of technical problems in the signing process is minimized. You can apply an e-signature in Vchasno.ODE from a personal computer or smartphone from anywhere in the world.

Storing

Once an e-contract enters into force, it’s important that all parties have access to it. This is how counterparties monitor compliance with its terms and conditions, a validity term, etc.

A key indicator at this stage is the secure storing of contracts. In Vchasno.ODE, the entire archive is kept in cloud storage on Amazon servers located on the territory of the European Union. Company managers can configure access to the archive for individual employees, grant or revoke the right to view, download or delete documents.

If a company concludes a large number of contracts, it is important for employees to find the right document quickly. The Vchasno.ODE service uses various filters for this: by document type, date of creation or signing, name or details of the counterparty, etc.

The advantages of e-contracting for business are quite obvious: quick conclusion of contracts, reliable storing of documents, and control over the approval and signing processes. With automation of contracting, companies can save time and money, as well as reduce the workload of their employees.