Businesses, no matter the size and type, rely on the use of contracts to make sure that their rights are protected and they are getting the best deal out of the agreement. Handling, monitoring, and storing contracts can be quite challenging, especially for a business that enters in more than 10 contracts every week. While smaller businesses can survive with the manual contract management system, larger enterprises need an end-to-end contract management software designed to increase efficiency, effectiveness, performance, and profitability.
TABLE OF CONTENTS
- What is the purpose of contract management?
- What are the benefits of a contract management system?
- Why is contract important in business?
- About Zendoc
What is the purpose of contract management?
The purpose of contract management is to ensure that all parties to the contract fulfill their respective obligations as efficiently and effectively as possible, achieving the required business and operational outputs of the contract and providing value for money. It helps businesses maximize their productivity while minimizing risk and decreasing time needed for each stage of the contract lifecycle.
What are the stages of contract management?
There are seven critical steps in the contract lifecycle that a contract manager should be aware of. It is important to understand what happens in every stage of the seven essential phases of the contract lifecycle to ensure that proper contract management conditions are being met at all stages. The contract lifecycle includes the planning stage, implementation stage, pre-contract stage, handover stage, contract stage, pre-renewal stage, and post-contract stage.
What are the key elements of contract management?
Successful contract management should be able to: realize expected business benefits and financial returns; gain cooperation and response from the supplier to meet the needs of the organization; create provisions of services that are satisfactory to both parties; and prevent contractual disputes and misunderstandings.
More on this topic: What does a contract management system do?
What are the benefits of a contract management system?
Having a proper contract management system in place can improve contract compliance, risk reduction, financial optimization, and document management. A working contract management system can also make the business ready for audit and renewals. Increased contract visibility and easy secure access provided by a good contract management system can help reduce time needed for modification and approvals, saving valuable time and assets.
What is the disadvantage of a management contract?
One of the major disadvantages of contract management is that the organization gives up a great deal of control over the services provided to customers. For example, when an IT company contracts the website support to its clients, its own employees will not provide day-to-day troubleshooting.
What are contract management skills?
To ensure expectations are set realistically and milestones are met, the following tools are essential tools in every contract manager's toolkit: smart negotiation and influence, effective communication and project management skills, and the ability to inspire and manage change.
More on this topic: What are the top 5 contracting skills?
Why is contract important in business?
In business, contracts are important because they outline the expectations for both parties, protect both parties if those expectations are not met, and lock the price paid for services.
What is the importance of agreement?
It is important to get your agreements in writing to protect your interests and enforce your rights. Also, both sides will then clearly understand what is expected of them and, more importantly, what has been agreed and what is not.
What is the primary benefit of contract law to business?
Once a contract has been created, it allows both parties to rely on the terms they have negotiated and plan their business affairs accordingly. It is important for a business person to know when simple communications turn into legal obligations. Contract law protects businesses if the terms agreed upon are not met or when the other party goes against the agreement set in the contract.
More on this topic: How do you build a contract management system?
About Zendoc
Zendoc is a full-service AI-powered contract automation system that not only organizes all of your agreements into a single database but keeps you up-to-date on what you need to do to extract as much value from your contracts as possible. You don’t have to worry about forgetting your obligations because you don’t have to remember them in the first place.