7 Features Businesses Should Look for in Contract Management Systems

Nov 29, 2018 Web Developer Management 0

Contract Management is the organization of contracts a business has with clients and vendors, but also consists of employee contracts or any other contracts that might need to be tracked.

Contract Management is at times also referred to as Contract Administration.

Managing contracts is the entire process from contract creation to negotiation of the terms in the contract to recording all adjustments made from the original contract. This is why most contract management systems also have good functionality for document management, and tracking revisions in the contracts.

So, What Exactly is a Contract?

A contract is a legal bond between two or more parties to fulfill what is agreed on in the contract. A contract as a rule has many terms and conditions included to ensure that everybody understands his/her duties. It’s important that a contract includes what will happen if it isn’t fulfilled as stated by the agreements.

Is your contract management system underutilized, incapable of providing valuable insights, and complicated to use? If so, your business could be susceptible to non-compliance risk and missing out on revenue opportunities. Consider these solid features before you spend any dime:

Contract Management

Contract management is the supervision of all phases and aspects of any and all contractual agreements including systematization in contracts, supply categorization, the creation of professional, certified contracts that meet legal demands, etc. Contract management systems facilitate management and the automation of reporting and tracking of contract processes.

Contract Creation

Contract creation entails the drafting of contracts from idea and discussion to completion. A contract management system will enable the user to automate the entire process into legal, binding agreements and contract changes in the form of amendments if needed.

This is crucial! Having a lousy contract management system might cause you needless stress because of legal problems with wrongly outlined contracts. The main reason why it might be necessary to have an automated contract management system is that it often will have proper wording and templates to ensure that the agreement is clearly explained and documented.

Contract Storage

Contract storage is rather self-explanatory. The user can collect, gather, and store all contracts in one system. Automated contract management systems provide the system to save contracts for good record keeping.

Having a storage system for your contracts with clients allows electronic copies of agreements made, amendments, modifications, etc. to be kept securely in one place. This avoids damage, accidental spills, and common loss of hard copy contracts.

Contract Payment Services

Contract payment services include payment tracking from contract initiation to conclusion of payment, the negotiation of payment terms, and establishing compensation methods. Contract management systems supports continuous services around the implementation of expenditures owed to partners throughout the life of the contract.

Having a place to discuss and record all payment negations is priceless. In the event of legal consequences or inconsistencies in contract negotiations, both you and your client can use a contract management system to automate and document all financial compensation methods.

Contract Negotiation

Contract negotiation involves verification completion, assessment and establishing payments owed according to the specifics in the negotiation for all parties. Contract management systems will enable the user to approve and validate chargeback claims for all contract partners.

As highlighted above, with a contract management system the entire negotiation process can be done in one system. This ensures that all parties involved with the contractual agreement have clearly documented claims stated in the proper format.

Contract Endorsement

Contract endorsement entails organized approvals based on milestones reached and changes made in contract negotiations. These contracts are online allowing parties to assess objective goals and submit approval.

At any point in the negotiation process or amendment of prior agreements, contract management systems allow all parties to deny or approve any part of the contractual goals of partners. This is important because nothing can be finalized in the contract without approval from all parties.

Contract Examination

Contract examination involves the investigation and analysis of the varying contract-based relationships over the history of the contract. Contract management systems allow the detailed scrutiny of the contractual agreements, financial analysis, and quality of contract implementation strategies for all clients according to individual demographics.

Top 10 Contract Management Tips

The right contract is Key

Lay good foundations by making sure the right contract is in place. If the contract was poorly constructed, it’ll be much more difficult to establish a successful relationship.

Actively manage the contract

Be ready to manage all aspects of the contract.

Embed service levels into the contract or develop a Service Level Agreement as an addendum

This is where risks are managed and service continuity plans are put into place in case of failure.

Measure quality and quantity

This means creating and using measurements that allow the quality of a service to be measured.

Ensuring value for money is about the balance between service quality and value received

Encourage innovation and continuous improvement from the vendor. All costs associated with the contract must be taken into consideration. Benchmarking can assist in providing price comparisons.

Manage your risks

Managing risk means identifying and controlling factors that might have an impact on fulfillment of the contract.

Establish good communication

Good communication allows problems to be identified and resolved early. Understanding the business culture helps to reduce tension and promotes harmony.

Deal with issues promptly

Problems ignored can fester and grow. A dispute resolution and escalation process should be defined in the contract to prevent crises. Aim to prevent problems as well as resolve them. Getting advice from a business law solicitor means you can get tailored advice and support.

Administration of the contract is crucial

Contract administration is importance shouldn’t be underrated. Well-defined administrative procedures make sure that all parties to the contract know who does what, how and when.

Document everything

Come up with ways to keep contract documentation updated and make sure that all documents relating to the contract are consistent.

Conclusion

Whew – so there’s our Top 7 list of features to look for in a contract management system.

Overall, contract management systems help you automate your business processes especially when it comes to managing contracts, which will be otherwise chaotic when implemented manually. Through this process, you can ensure growth by improving spending efficiency, minimizing risks and enhancing overall operational performance of your business.