Do you believe your organisation is sticking to best practices for contract management? Take a look at some of the most critical factors you should be considering. You can use this to work out where to make improvements in your contracting process to deliver much better outcomes.
Most Important Considerations During the Contracting Process
Standardise Language. Sound contract management results in more efficient working practices. One such area includes the ability of your legal department to develop a standardised language which can apply to a large number of contracts. This has the effect of significantly reducing the review time needed to approve contracts. Achieving this is much easier using contract lifecycle software.
Set KPI’s. KPI’s allow you to set goals for all departments within your business, and staff are more prepared for the results expected from them. By setting clear KPI’s, it’s much easier to determine where the leaking of production issues or money is occurring.
Keep Documents Secure. As well as making access much more straightforward, keeping documents in a secure place also improves security by verifying the user trying to gain access. It helps maintain high levels of confidentiality and makes access much more manageable as everything remains centralised. Moreover, users can be granted with varying degrees of access, depending on their needs. All of this is achievable using contract lifecycle software.
Track Time for Approval. By tracking how long it takes for a contract to get approved, savings in time and money will occur. This is because the cycle between initial conversations through to final agreement becomes shorter, which has clear benefits to both parties. Opportunities become captured more quickly, and turnaround times are improved.
Leave E-mail Behind. E-mail in contract management is dated and wastes both time and money. By using a centralised cloud-based repository as part of contract management software, multiple users can access documents at once. Collaboration becomes easier because users feel reassured they are accessing the correct version at the right time. Automatic reminders take the hassle out of missing such events.
Monitor Finances. A significant advantage of using contract management software is the cost savings involved. However, the benefits don’t end here. Improved negotiation can take place between both parties, monitoring of performance is enhanced, and auto-renewal saves money. Regular financial review ensures that contract performance meets the expectations of the clients original budget.
Conduct Regular Reviews. Contracts often need to comply with federal and state laws, and if they deviate, the imposing of fines or other penalties can occur. If serious breaches occur, a company can lose its license altogether. Compliance tracking within contract lifecycle software prevents this, protecting companies from such risks.
Resolve Disputes Swiftly. Contracts can be reviewed regularly, but require associated followup for any discovered issues. Through continuous proactive response, contract managers can help resolve common problems in areas such as budget and performance.
Establish Requirements. Business requirements change, even after the contract is signed. Resultantly, the demands and capabilities of a business must be reviewed on an ongoing basis so that anything that gets in the way of a good working relationship is reduced or eliminated.
Compare Market Trends. Regular contract review, along with market and pricing research, is necessary for businesses to establish the most favourable negotiation possible. By doing this, the contract can be reviewed to ensure the most favourable terms are being applied, and if not, necessary changes can be made.