Select Stage to get more info -- >
Staying on top of renewal timelines is vital to maintaining business relationships. Failure to do so, can see you having to cultivate a business opportunity with someone new. And as everyone in business knows, it’s cheaper to keep a client than find a new one.
Which is why it’s so important to keep track of when a contract is nearing its renewal period so as to prevent any hiccups to your back-end operations or operating system. There is always the possibility that not keeping track of when a contract is up for renewal will result in loss of revenue.
Trying to do this manually is time consuming and can be clunky—you’ve got to assess how clauses are phrased across different departments, and the legal team has to assess the contract. And these are just some of what’s involved.
By using contract management software, all your contracts are stored in one convenient place. The advantage of this is that you won’t lose contracts in transit or in filing cabinets. Which means each department can access what they need to quickly, and easily.
And it will be straightforward for account executives to monitor any contract commitments as well as track renewal cycles.
The contract lifecycle management process begins with a contract request.Probably the least thought of, and certainly least discussed part of any contract, it is actually one of the most important parts.
Before you put pen to paper, you need to ensure you have a solid understanding of exactly what it is you’re trying to achieve with this contract. Doing this will make future decisions make easier and smoother.
For example, if the contract is to ensure certain deadlines are met within budget, your contract should include language and KPIs that help to protect you. And to help make sure your desired outcome is obtained. Sometimes a contract is for something as simple as ensuring you are paid after you’ve provided your services.
After you have established your needs and identified your main reason for acquiring the contract, then it’s time to begin the contract request process.
This process involves one party either initiating or making a request for a contract. This same party uses information to author, or draft, a contract document.If the contract request is approved, both parties move on to the next step. Requesting a contract is the first step in the contract lifecycle management process.
Authoring, or contract authoring, involves reviewing and red lining as well as contract negotiation. This is also known as the draft stage which involves the creation of a document that includes terms and conditions as well as clauses.
As a legally binding document, you need to approach it with all possible care and attention. When drafting a contract, you need to be mindful of as many scenarios as you can consider, and make sure these are addressed in the contract. Part of ensuring correct language use will be taking state laws into account when drafting the language.
It’s important you’re specific with your wording, as any ambiguity can leave your contract open to unwanted interpretation. Kind in mind any state and national laws that will guide your contract—and not just your state, but whichever state the other party is in.
At this part of the process signing parties and contract approvers are determined and their details added to the contract document.
At this stage of the contract lifecycle management process, the contract request information is inputted. And the agreement document, usually in Adobe PDF or Microsoft Word format is saved, and kept on record in the document management solution.
How well you negotiate the contract can determine whether you come out a winner at the end of the deal. All the research and planning can be for nothing without access to all the critical details.
For example: you should have access to all pertinent information such as reports which score your potential employee’s, partner’s, or vendor’s capabilities.With access to this information you will be able to better understand the other contract partner’s goals and intentions.
Before you start to negotiate, it’s necessary to have an in-depth understand of the other contract partner’s point of view. And with this understanding, look at the contract in detail through their eyes. This technique is useful in finding questions they might ask in the negotiations and giving you the time to consider your responses ahead of time.
The old way of doing contract negotiating involved sending contracts with changes back and forth either through the mail or over email. Which is not only tedious but can also result in costly mistakes. The new way is with contract management software that allows both parties to work on the document in real time.
The benefit being faster contract negotiations which make both parties happy.
After successful negotiations with both parties in agreement, now the contract must get approved. How this happens will depend on your organization. For example, if you’re a freelancer with no auditor or manager to answer to, then the approval process is on you.
However, if you’re in an organization or company that either has audit procedures or needs a manager’s approval, you must make sure all approval requirements have been met before the deal is finalized.
In some cases, you may need to have a lawyer (or your legal team) review the contract as part of the approval process. Once they approve the contract document, the contract management lifecycle moves to the next step.
Of course, the approval process can be made much simpler with a contract management platform. This can be done as easy as setting up an approval workflow.
With this workflow, whoever needs to approve the contract will get a notification.They can then view, edit and comment in real time on the contract as needed. With contract management software, changes can be kept, tracked, and archived for future reference.
The approval workflow process helps to approve contracts in a way that is highly-applicable by ensuring compliance.
The execution or agreement signing of a contract is when the approved document is sent to all parties for signatures. If you’re doing this manually, it will involve sending a number of copies, and then waiting to get copies back.This is where a major bottleneck can be caused, and problems can arise.
If people signing the contract are in different states or in other parts of the globe, and there are different time zones and tight deadlines, overnight delivery or express mail won’t always make it in time. Especially, because it is got to get there and back, which can add extra pressure on getting the contract back for the deadline.
With such a globalized business world, it is much easier and more streamlined to do contract management through cloud-based software: such as ContraxAware’s contract management software. This allows for a contract document with electronic signatures from all the parties involved in the contract. A benefit of this is it’s all done in real time.
This is why an increasing number of companies are moving to contract management software.Electronic signatures (e-signatures)are legally binding, and are a far more reliable way of getting a contract executed in time.
Obligations management is a crucial part of the process. Indeed, if the contractual obligations arenot managed properly, it can spell disaster for the whole deal. And it takes a lot of skill and time to successfully manage a contract.To do this, the commitments of all involved parties must be managed properly to make sure each stakeholder meets their deliverables and their other obligations.
Another aspect of obligations management is ensuring the contract’s value doesn’t deteriorate in its early growth phases.This requires you, or whoever is in charge of managing the contract, to use schedule reminders. This will help you stay in compliance with your company’s end of the contract, and it can help to make sure that the other parties to the contract are also maintaining their contractual obligations.
The other part of obligations management is ensuring all records and documents are stored with backups. This is to ensure all your important records are safe and secure, but still easy to access.
Contract management software makes keeping tabs on obligations of all involved parties much easier, with the ability to set up reminders and notifications.Which enables all involved parties to stay on top of the contract.
A contract that has been approved and signed by all parties can be subject to revisions and amendments. And in fact, the likelihood of a contract finishing looking exactly like it did at the start is incredibly rare.This is especially true of high-end contracts with a lot of moving parts over an extended period of time.
Amendments can be beneficial, because instead of replacing the entire contract, only those parts and sections which need changing can be amended.Which is much easier than having to create an entirely new contract.
With many amendments and revisions being made to a contract it can become difficult not only to keep up with any changes, but also how these changes affect all parties involved.
The implementation of a reliable process is necessary in order to keep track of any changes as they happen. This way nothing slips through the cracks, and all contractual obligations, amendments, and revisions are met as (and when) they arise.
The easiest way to keep track of contract amendmentsis through a contract management software. With it, you can set up notifications, and easily keep tabs on changes that have been madethroughout the lifecycle of the contract.
Auditing a contract is a necessary part of ensuring all involved parties are complying with the terms of the agreement. Failure to audit a contract can result in many things including: missed deadlines, unforeseen issues, and loss of revenue. One of the biggest problems with not properly auditing a contract is that it can auto-renew without your knowledge. Leaving you stuck with a contract if you were looking to get out of.
By setting up alerts and notifications in contract management software, auditing can be a smooth, seamless process. It can help to ensure you stay on top of deadlines as well as when a contract is up for renewal. If you want the contract to be renewed, knowing before hand gives you time to make sure everything is in place and ready to go.In making sure everything has been delivered, and you have provided reports to keep other parties in the loop, you’ve given the other parties every reason to renew the contract
With contract management software, reporting has never been easier.Reporting is necessary throughout each step of the contract management lifecycle. Reports can provide a 360-degree view of assigned tasks, workloads, deadlines, renewals, and a general overview.