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Six Steps for Effective Contract Management

Modern Platform Will Provide Benefits

Having a sound contact management plan in place means that the team will be able to efficiently manage risk and provide more value to your business.

Companies implement a variety of different processes to manage the negotiation, performance and termination of contracts with other parties, including vendors, customers, contractors and distributors.

A modern contract management platform will provide a range of benefits for buyers and suppliers. You should make sure that you start with a full investigation of the business and legal background. Company representatives should be interviewed to ascertain how the relationship has come about and what promises may have already been agreed by both parties.

In collaboration with the representatives from the company, it’s good protocol to start by identifying the process that needs to be undertaken to comply with the contract requirements. The contract, for example, may need to be approved by senior managers or the board of directors.

A Cost-Effective Process Should Be the Focus

According to ECM Connection, clothing chain Urban Outfitters is use Corridor’s Contracts 365 contract management approach to manage contracts in the cloud.

A plan should be developed to implement a Contract Management System that ensures that all departments in a business focus on delivering a cost-effective approach.

Ideally, one staff member should be allocated the responsibility for contract management. This can be the purchasing manager. The plan should lay out tasks to be accomplished, who is responsible for the completion and the proposed completion date.

A work flow should be specified, and those in the department responsible should be fully trained in all aspects of the contract management process. Metrics should be established to measure and assess the success of the contract management function within a business.

The contract management system should be audited using a checklist for reference. And this checklist should clearly specify what to audit and inspect.

Contracts are legal documents, and it’s important to be prepared with the correct resources. Contracts should focus on mitigating risk in a relationship and looking to potential scenarios that may occur and accounting for these in the contract. For example, the written terms of agreement in the contract should outline what will happen if the client should file for bankruptcy or if it goes out of business.

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