Every business transaction, whether it’s for an employee to a business, or a corporation to corporation transaction, has to have signed contracts. This is regardless of industry, location, or business size. As such, contracts need to be treated with the utmost of importance, as they guide everything from supplier and manufacturer relationships to when and where an employee needs to work and how much they get paid. However, most organization do not take the steps to manage their contracts, particularly when there are set KPIs that need to be met in order for the contract to continue.
Whether you only have a handful of contracts in your business or have hundreds, it is essential to use a contract management system to make sure that all of your contracts are easily accessible and can easily be tracked for performance. Fortunately, this can be done using the contract lifecycle management process, which can help you manage the contract from its inception to when it expires.
To start this process, you first need to create a standardized contract template. While a supplier contract and an employee contract are fundamentally different, there are certain standards that you are going to want to and need to set when it comes to contracts. Once these standards are set, you can use the contract lifecycle management process to manage all of your contracts from a central hub and track where they are within the lifecycle. This prevents you from missing any signatures or steps in getting a contract approved, and can allow you to clearly track any deadlines that are set within the contract.
You also need to be able to manage the time that it takes to get a contract approved. Normally, you need to send out a contract, wait for approval, negotiate any changes needed, send out the revised contract, and then store it. However, when using contract management software, this process is all automated, so that you don’t have to keep on top of every little detail when it comes to time management of contract approval. You also need to make sure that the contract itself is actionable and that it is priced correctly based on things like supplier bulk discounts and other factors. This can all be added automatically into a contract’s agreements, and if there is a bulk discount or something of the like, it can be automatically added to the billing agreement after that threshold has been reached.
Finally, it is extremely important to track all the changes that are made to a contract. If this is not done, the contract renewal process can become messy and disorganized, especially if there are multiple copies of the same draft of a contract, or miscommunication between the signatories of a contract. As such, it is important for all businesses that are involved in the creation of contracts to thoroughly invest in the contract lifecycle management process. Not only can it save time, but it also centralizes and standardizes information so that it can be tracked and monitored on a regular basis.