Contract management tools are powerful resources that ensure compliance with terms and clauses of all agreements.
In addition, they facilitate contractual procedures and contribute to the verification of contract renewal.
In this article, you will learn about the stages of contract management and the best tools to implement in your company.
First of all, what is contract management?
Contract management consists of a series of procedures and attributions that facilitate the control of contracting in a company, from the formulation of the first proposal to execution.
B2B and B2C companies deal with contracts on a daily basis, which, in short, are sustained agreements between two or more parties that decide on rights and responsibilities between those involved.
Anyone who is a recurring service provider signs a contract directly with the consumer, but it is also necessary to hire suppliers , partners and other entities.
In view of this, contract management is a kind of insurance that ensures that services are performed efficiently and within the established period.
Which results in more control, fewer errors and optimization of a company’s processes.
What are the benefits of contract management?
The benefits of contract management are:
- Monitor all stages of the contract sales cycle ;
- Control the storage and history of documents;
- Identify churn and upsell possibilities ;
- Enhance the company’s internal communication and, above all, with customers.
At the same time, you must ensure that the agreement entered into is enforced or amended where necessary.
Naturally, this entire process avoids errors, inconveniences and delays that could harm your company’s relationship with its partners and consumers.
How to manage contracts?
Once you understand what contract management is, it’s time to implement this process in your company.
To do so, you need to follow a few simple steps:
- Map your contract flow;
- Identify critical points;
- Standardize the steps;
- Control deadlines and clauses;
- Use technology to your advantage.
1- Map your cash flow
Let’s start with the basics: do a complete study of the contract flow according to the particularities of your company.
In other words, analyze all signed contracts and seek to understand the life cycle of documents.
That way, you’ll have a complete picture of the volume and management needs of your documents.
But you must be wondering: what makes up the lifecycle of documents?
2- Identify the critical points
The life cycle of a company is not always the same. That’s because we can have obstacles at different stages.
For example, a service provider that operates in the recurrence economy may find it difficult to monitor the salaries of contractors and resort to the commercial team to try to renew in the appropriate period.
Other companies may have impasses in reconciling the payment terms of suppliers provided for in the contract with their cash flow .
In some scenarios, negotiation is the most complicated period, especially when it comes to contracts in the B2B area, which undergo the approval of several employees and require clauses with different details.
3- Standardize the steps
Suppose you are a big company and you need to write hundreds of contracts daily.
When doing this process manually, you will probably have delays, more chances of errors and difficulties in analyzing the data.
To circumvent this scenario, standardize your company’s steps. Thus, your work will occur with more agility, quality and professionalism.
4- Control deadlines and clauses
As we saw above, contracts are dynamic tools that can change at any time.
Therefore, it is vital to closely monitor deadlines and clauses, discovering needs for revisions, additions and amendments in time.
Successful companies use a system that keeps track of dates, as well as assigning a professional to review conditions and keep parties informed.
5- Use technology
Contract management software provides unique features for online contract management, electronic signature (digital certificate) and document sharing.
An example of this is ERP (Enterprise Resource Planning) or CRM (Customer Relationship Management) software .
With these tools, you dedicate your efforts to a single system and easily follow your deadlines and conditions, as well as have uncomplicated access to any document.