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5 Stages of Contract Management

Contracts are legally binding documents that help finalise business agreements and significant deals. It is considered a valuable asset to any company with the huge role it plays in the entire business operation. However, managing these files may prove to be a gruelling and tedious task. This comes even worse when a business enterprise solely relies on the manually-operated method of administering contracts.

As any business expands, it always comes a necessity for the company to improve its business processes in order to maximise its financial gain and protect other resources. This involves incorporating advanced technology in the company system including a Contract Management Software.

Contract Management or Contract Administration refers to the procedures which guide the companies in the contract processes – from negotiating with clients and vendors, optimisation of performance, executing changes, and managing renewals and termination. With a proper contract management system, it becomes easier for companies to achieve success with a pool of extensive benefits. However, undergoing a transition from standard into an automated system may be a daunting process since it requires enough time and capital. But once the cloud-based solution is implemented, your transactions are guaranteed to run smooth and fast making the time you allocated and money invested worth it.

There is a variety of software that are now available in the market which companies can acquire to effectively keep and organise their contracts. Although Excel spreadsheet may prove to be helpful, it comes out with a set of cons which usually delay business transactions. Excel contracts may not seem reliable and accurate at all times since the manual method is prone to mistakes. Contract Management Software provides users with an advanced, useful, and easy-to-use platform which help companies to manage and secure contracts. Regardless of the type and size of the industry, it is important for any business enterprise to pay rigorous attention to these legal documents since it contains all the liabilities and commitments of the company and the parties involved. Failure to handle contracts may put the business at risk.

If you are planning to implement a Contract Management Software, you ought to have enough knowledge on how the cloud-based system works. Below is a list of stages on Contract Management which you may find helpful as you do the switch.

1. Contract Preparation

This stage involves identifying the needs for contracts, setting goals and expectations, review and creation of templates and new contracts. You should specify the reason why you are creating a contract in the first place. Once done with this, you can eventually move on to the drafting process. Remember that contracts should contain all the terms of agreements and the specific date of its effectivity. The liabilities and commitments of the involved parties must be clearly explained in these legal documents. This way,  you can keep your monetary resources protected and secured.

3. Authoring the contract

Before proceeding to other contract processes, have your legal team to check and review all the contracts. Any words, even punctuations used in these documents are weighing importance. Statements shall be written in a clear manner to prevent any misconceptions. Moreover, the laws shall also be referred to in the contracts to protect the rights of both parties whenever any contingencies occur in the long run.

4. Negotiation

Transparency is relevant to contract management. Building business relationships is just like establishing any other kind of relationship – trust is key. Both parties involved in the agreement shall have complete visibility of the contracts. Vendor and supplier negotiation is important to keep each fully aware of all the stated liabilities and commitments. This helps prevent misunderstanding and confusion. If one party doesn’t agree to a particular condition, then it could be amended right away until a mutual decision is achieved.

5. Execution

Electronic signature or e-signature is one of the perks one could get from acquiring a Contract Management Software. Although signing might be the easiest stage in contract creation, it often turns out a problem when both signees cannot adhere to the same schedule. This is even worse when the other party that needs to sign is located overseas. With e-signature, signing is made effortlessly easy for quicker and smooth business transactions.

6. Contract storage and integration

Once the contracts are finalised and signed, you will need to have it integrated into your company system. It is the backbone of all your commercial transactions which determine your system flow. Keep it organised and secured by putting it in a digital storage place. Make sure all the confidential files can only be accessed by authorised personnel.

7. Revisions

Your company demands may change over time and so are your clients’ needs. This is what drives up for revision and amendments in the contracts. With the cloud-based system, both parties can easily collaborate and discuss changes in the contracts. The online platform also provides users with a record of edits and revisions.

8. Contract Auditing and Managing Renewals

The contract management process does not end by simply depositing your contracts in the digital repository and integrating it in the system. For the best contract management, make sure you perform regular audits and set notifications for any contract termination and renewals. With this, you are able to protect your business relationships and your financial resources.

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