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Whether you are a business owner or not, contracts can be tricky and confusing. As a result of this, many businesses struggle to maintain successful contract management. The situation can be worse if you are managing multiple contracts or as the business is growing, it can be difficult to keep track of everything. This can lead to missed deadlines and missed opportunities for new clients. Here are 5 tips for successful contract management.
What is Contract Management?
Contract management is the process of managing information related to your contracts. Businesses need to have good contract management systems in place because a good contract management system will help you to:
- keep track of payments and deadlines
- Stay compliant with the terms of your contracts
- Improve contractual processes
- Maintain relationships with suppliers and clients
A good contract management system such as the one from contractsafe can also help you ensure that you are correctly getting the best deal from your suppliers.
Tips for Successful Contract Management
1. Come Up With a Good Contract Team
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Successful contract management requires a resourceful team to solve any predictable and unpredictable issues that may arise. The team should know how to relate with different stakeholders and resolve any issue before it escalates.
Before setting up your contract management team, ensure that they understand:
- Every operational aspect of any department or service that the company outsources
- The responsibilities of every supplier or business partner
- The outcomes of a business and how to achieve the outcomes
- Possible legal issues related to the contracts and how to resolve them
A good contract team ensures that there is someone responsible for everything. Such a team makes it easier to manage contracts and solve problems as soon as they arise.
2. Invest in a Strong Document Storage and Sharing Facility
Contracts can be hard to manage if you do not have strong document storage and sharing facility. Since most contracts have a life cycle of more than a year, storing them safely and securely is necessary. It is also important to ensure that the documents are well-organized.
The document storage and sharing facility should be on the cloud to make it easier for the contract management team members to access them anytime and from anywhere. At the same time, be sure that your sensitive information is safe from cyber-attacks. You will need a reliable malware and virus detector.
3. Be Aware of Legal Clauses
Legal clauses are present in every contract, and businesses need to know what they entail. The clauses may be essential or non-essential, and you should know which ones to prioritize. You can then work on reducing the non-essential clauses to an acceptable level.
Try to understand what each clause entails before agreeing to its demands. It is also important to compare your contract to similar contracts in the market. Keeping your legal team involved in the contract is also essential, even if you expect any disputes. It will help you ensure that you are well covered if the other party takes advantage of your ignorance.
4. Have an Escape Route
The relationship between a business and its supplier can change with time. Your contract should have an escape route. How will you get out of the contract if you need to? State the terms that can nullify the contract and develop rules for ending a contract before entering into a contractual agreement with any party. While setting the terms for nullifying contracts, be wary of court cases for breach of contract.
An escape clause allows you and the supplier to end the contract with minimal losses. If your supplier develops an unsafe product or takes advantage of you, it is better to end the contract and find another supplier.
5. Use Contractsafe Software for Contract Management
Contractsafe is software for contract management. It helps manage every part of the contract lifecycle, from initializing the process to negotiating and drafting a contract to management. Using this software automatically ensures compliance with the terms of the contract. This saves businesses from any legal and financial costs that could arise from non-compliance. With this software, you will be able to access any contract when you need it, allowing you to leverage the terms of a contract on time.
What are the Benefits of Contract Management?
There are many benefits to good contract management, some of which include:
- Staying abreast of terms and conditions
- Staying abreast of deadlines
- Reducing the chance of audits
- Better information retention
- Compliance with company policies and regulations
- Automating tasks involved in contract management
Start practicing good contract management, and your business will enjoy the benefits above.
Proper contract management is essential in every business. Start practicing the tips above for successful contract management to save your business from problems that come with poor contract management.