Small business owners, on many occasions, find the industry intimidating and unfair when in the same room with large-scale business operators. One big scenario is when terminologies like contract management are the talk of the day. They assume that they are just for large businesses.
The good news? Contract management is an area small business can pursue and excel with flying colors. Generally, this is a process that involves the management of agreements with chosen partners and their sustainability.
Probably you have ever engaged in a purchasing and sales business agreement. If your answer is a YES, then there are no reasons why you should pursue contract management. You will learn more about the processes, strategies to embrace, benefits, and why settle for ContractSafe as your reliable contract management software.
This article will give you an ultimate guide to small business contract management. So, keep reading.
Understanding What Contract Management Brings About
Contract management doesn’t only revolve around developing agreements with different parties and getting them signed. There are a series of actions the team involved in the process should pay attention to during the whole exercise. Contracts entail information about transactions, parties involved, the project at hand and its nature, set deadlines, and scope of payment.
From there, you need to look at the different stages of contract management that will guide you through the entire process. These stages will be divided into:
This stage is principally a cross-party undertaking and involves manual tasks and negotiations. It is divided into:
- Contract initiation– This is the stage where all the contract needs are identified. Here the life cycle starts, and you must know who you are working with, whether a vendor or a new supplier. There needs to be a contract that sets the pillars for a business relationship.
- Authoring- You can automate this step if you are a tech-savvy business. However, many business newbies prefer the contract to be written.
- Negotiation- There are clauses in the written or automated agreement to negotiate. Both parties have to sit down, agree on the necessary changes, and leave satisfied.
- Editing- You need to finalize the final product. Editing a contract manually is time-consuming, and here is where your software will come in handy.
This stage deals majorly with managing the signed contract and enforcement. Here are a few steps to keep in mind:
- Execution- The parties involved need to execute the signed agreement.
- Tracking- Following up on what is happening in each stage of the contract lifecycle will ensure compliance and a clear understanding of the merits of the contracts.
- Auditing- An audit will give you an in-depth look at the performance of a contract.
- Reporting- You need to provide an overview or truth of your findings. The data you come up with will help bring actionable insights and improve decision-making.
- Renewing- Now that you have seen through the contract’s lifecycle, make a decision. Will you renew, renegotiate or terminate it?
The entire contract management process can be time-consuming, daunting, and one-sided. This is why the demand for reliable contract management software has surged significantly.
But before looking at the benefits of using software, here are strategies for effective and practical contract management. Have a look:
Do Your Research Extensively
As a small business owner, don’t be intimidated and sign anything on the table. Do a background check about the other party and know what they represent.
Institute Points of Contact
To avoid misunderstandings, establish who will make the final decisions. That way, every individual will place their role in the contract management lifecycle.
Establish All the Needs of Your Contract
Ensure all the life cycles of the contract are met and contractual requirements are precise.
Agree on the Review Process
Budget adequate time for reviewing every stage of the contract management lifecycle. Make sure you draft everything.
Outline the Consequences of Misunderstandings and Delays
If the contract delays or fails, your business will suffer losses. So, make the right decisions.
Document and Evaluate
Don’t rush to sign the contract. Take time to document and evaluate every stage of the contract. Sit down with your team and go through the whole document once meticulously.
Benefits of Investing in Contract Management Software
Effective contract management is imperative for your small business. It’s the pathway to better business deals and growth and saves time and resources. Here are a few other ways reliable software can bring value to your small business:
- You will effectively standardize your contracts as you can choose from different templates and ensure consistent clauses and text.
- Find it easy to monitor and track changes at every contract stage.
- Smoothly streamline your contract approval process and avoid delays or misunderstandings.
- Keep your contrast safe and in one secure place.
- Embrace automated contract alerts and stop wasting time looking for the right contract.
- Utilize E-signature technology and have your contract signed in a matter of minutes.
- Simplify the contract negotiation process by shunning tiresome contract printing and scanning tasks.
To Sum Up
The business world is competitive these days thanks to the advent of the internet and better technologies. Even if you are a small business, don’t feel intimidated when it comes to contract management, a field perceived to favor large companies. There is much to do and effectively implement contract lifecycle management into your business. Most importantly, utilize the best software in the market, streamline the processes involved in such a project, and strengthen your business.