Published on June 12th, 2019 | by Barry White0
Ways To Improve Your Company’s Contract Management
Contracts are one of the most important assets that your company can have. It affects your revenue and also your company’s current standing. Contracts encompass a lot of business deals. Some of it are just basic agreements while most are crucial to the company’s survival. The most common contracts are between Employees, Vendors, Suppliers, and Customers.
Contracts are legally-binding. It is a written agreement that maps out an employee’s duties, rights, and responsibilities, the terms of a sale, tenancy, etc. It should deal with all contingencies regarding a special agreement. I can’t stress enough just how important contracts are to your company.
Without contracts, your employees can do whatever they want such as steal from your company or not go to work for an entire month, disappearing to God knows where and then suddenly returning without an explanation and no sanctions.
A contract-less company will be prone to abuses such as inadequate and incompetent service from your Vendors and Suppliers. Because there is no legally-binding agreement, both parties can do whatever they want without any sanctions on disruptive behaviors.
Contracts also help keep business relationships professional while providing boundaries and parameters as to each other’s roles. This is important to ensure that all deliverables are properly delivered. Setting up Key Performance Indicators (KPIs) on your contract will also allow you to terminate any asset that are not performing and is considered a liability to your company.
Contracts require careful and proper management if you want to reap the benefits and minimize the risks that your company will be undertaking. An effective Contract Management strategy is crucial if you want your company to survive and grow.
Here are some ways that would improve your contract management strategy. An effective strategy would greatly improve your company’s operations which could help with future scaling opportunities.
Centralize Your Contracts
A contract management software will allow you to consolidate all of your contracts. It would be for the best if you know where your contracts are at any given point. They should easily be accessed for better and ultimately faster decision making. This may sound like an obvious tip but you would be surprised to know that the vast majority of companies cannot quickly find 10 percent of their contracts.
Having a full visual of all your contracts will allow you to manage your contracts properly. For example, without knowing the terms agreed upon on contract signing, you would not be able to find out whether there are under-performing employees. Suppliers and Vendors may also not be delivering properly the agreed upon deliverables for you.
Aside from the performance rating, a Contract Management Software will also provide you access to the technical details such as Contract Renewal Dates, Termination Deadlines, etc. Just crucial information that will help you make an important business decision. Instead of deciding blindly, you would be taking a more thoughtful and proactive approach.
A Contract Management Software will allow you to organize your contracts in a secure cloud. Security, Ease of Access, and Organization are just some of the benefits that a Contract Management Software provides. Most of the contracts you’ll be dealing with will mostly contain sensitive information such as company secrets. Protecting them from third parties are made easier by integrating a third-party cloud software with state-of-the art protection codes.
Another thing a Contract Management Software can do is to pinpoint inefficiencies in your office operations. When you run an office, it would be great to know which parts of it are inefficient.
Make Sure Your Contracts Have a Follow-Through Plan
Sometimes businesses are more focused on just signing the deal. This means that after that, there is no follow through as to what happens after. This often leads to under-performing contracts. Contract Management also involves the follow up on the plans that you have agreed upon.
The execution of your plans are important as this will determine whether you are breaking the terms that you signed on or not. Noncompliance costs are also huge. One problem that companies often face is non compliance and contract breach. It might be unintentional but it happens because of ignorance. You just simply did not know that there were some terms that had to be followed. Unfortunately, “I did not know,” does not exactly hold up in court as a valid excuse for a contract breach.
Automate International Clients’ Contracts
Landing international clients is hard enough as it is. Getting them to sign contracts would be harder as you would need to spend a lot of resources. Contracts, before eSignatures, had to be signed physically which means that the contract had to be mailed to your client and then back to you.
Unfortunately, this seems like a waste of resources anymore. Contract signing used to be expensive. However, a Contract Management Software already has an eSignature feature which will allow you to sign contracts digitally. This makes the entire process much faster and easier. Now there would be no need to fly out someone just for one measly sign.