A data room is a secure place where confidential documents are kept and made available for access by a specific group of people. It is an innovative solution that is used in most business transactions. So, what documents does this software contain?
Virtual data room – a new digital workspace for business deals
Contractual activity has always been the main process in any business. However, the ability to intelligently manage contracts, build collaboration and ensure transparency in the workflow process is what progressive companies are now focusing on, striving for process automation and transparent management. Virtual data room software can help business leaders organize contractual activities and work with documents as conveniently and quickly as possible.
The program makes it possible to quickly prepare a draft document by filling out a special template – the employee only needs to check the correctness of the data and start the approval process, which can also be done automatically according to the already established regulations. After completing the processes, the document can automatically be transferred to the counterparty. In addition, the system can generate documents related to a particular transaction and receive reports on work on any contract.
How does the software work?
In a data room, you can conduct full-fledged work with documents, with external and internal correspondence, and keep registration logs and nomenclature of cases. As part of managing contractual documents, the solution’s functionality allows you to automatically generate the desired contract using a ready-made template and organize the approval process following the organization’s internal rules. As a result, the organization’s reputation improves by accelerating the formation, delivery, processing of documents, and the timely fulfillment of obligations.
There are some tools that help to optimize the document workflow with counterparties:
- approval routes – documents can be automatically transferred between employees according to specified steps,
- tags – allow you to find the files you need in the archive quickly,
- templates – simplify the exchange of documentation when working on an agency scheme in the presence of remote representatives, partners,
- automatic verification of the format and validity of the electronic signature certificate – an incorrect document will be returned for revision,
- custom web forms – needed to follow the corporate style of the company,
Common types of documents in a data room
The documents in the data room are based on the specifications of the business transactions. The data room is mostly used for the organization of M&As, IPOs, real estate, due diligence, capital venture, and other transactions. Therefore, the most popular kinds of documents processed in a data room are:
- annual financial statements and tax returns;
- customer and supplier contracts and their relationships;
- financial contracts with credit institutions;
- agreements for licenses, leases, rentals, or patents;
- official permits, environmental regulations, test reports, etc.
All documents are stored on servers in data centers, so information cannot be lost. It is safer than storing it on a personal computer. You can set up routing in the data room – assign a department that will automatically receive documents from a specific counterparty. Besides, the security of the data during transmission to and from the data room and during storage is guaranteed by the providers using the latest encryption technologies.
You can quickly compare the data of reconciliation acts in a data room. For example, if companies have been actively collaborating for a year, they may have more than a hundred transactions, and manual verification will take a long time. The data room will do this automatically; the software will generate a reconciliation act, compare the data and issue a discrepancy report.