Contract plays a crucial role in maintaining the relationships of a business enterprise. While smaller businesses can survive with just verbal agreements and handshakes, larger companies can easily fail without proper contract management. Contracts cover almost everything in the business, from how employees are expected to complete their tasks to how deals and agreements made with other companies should play out. It outlines roles, responsibilities, and obligations of every party involved, and may have legal repercussions once the terms are not met. To avoid potential loss and liabilities, it is a must that businesses have a proper and working contract management system in place.
TABLE OF CONTENTS
- How do contract management systems work?
- What is the purpose of a contract management system?
- About Zendoc
How do contract management systems work?
Contract management systems work by allowing business owners and employees track and manage contracts through the various stages of their lifecycle. A proper system of contract management should give a level of control to the business when it comes to authoring or drafting contracts, negotiating with all parties involved, soliciting contract approvals, executing contracts, tracking terms and obligations, making amendments and addendum, and renewals/terminations.
What does good contract management look like?
A good contract management system should enable users to organize, track, and automate every phase of the contract lifecycle, from drafting to renewal/termination. It should also have a centralized data repository with easy-to-use metadata for quick searching. A good contract management system should also send alerts or notification of contract milestones, as well analytics and reports. So what about Zendoc?
What should a contract management plan include?
A contract management plan is a kind of document that contains all the key information outlining how a contract is handled. It may be a formally written document that outlines nearly every detail about the contract, or an informally written one that only has top level information. Contract management plan documents typically include requirements of documentation delivery and requirements of performance. In most instances, they also set out systems, responsibilities, and processes that ensure the compliance of all parties with the terms and conditions indicated in the contract.
More on this topic: How do you keep track of contracts?
What is the purpose of a contract management system?
The primary purpose of a contract management system is to ensure that all parties involved in the contract fully meet their responsibilities and obligations as efficiently and effectively as possible. It also makes sure that each party delivers the business and operational outputs indicated in the contract and provides value for the money. Contract management system also protects the right of every party involved, ensuring required performance is met when circumstances change.
What are the steps in contract management?
Contract management system should be implemented in all phases of the contract lifecycle to be more effective. Each phase should be able to meet the standards included in the contract management plan before proceeding to the next one. This means that a good contract management system should enable the users to have access and control in planning - implementation - pre-contract - handover - contract - pre-renewal - post-contract.
Do I need a contract management system?
The need for a contract management system depends on the scale of business. Small and midsize businesses may need a basic contract management system that provides help in contract creation, template, e-signature, and electronic storage. Meanwhile, larger enterprises that operate in multiple areas may require a more capable and feature-loaded contract management system. If the business is handling multiple internal and external deals, it is great to consider a contract management system that allows users to have collaborative authoring, automated approval process, automated alerts for tracking milestones, enforcing contractual obligations, and integrating external ERP or CRM solutions.
Why don't you find out for yourself though? Try Zendoc for free today.
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