Here's everything you need to know about mastering the contract management process.
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The Contract Management Process: What It Is and How to Master It

Will Cannon

Last updated on February 8, 2022

The contract management process involves managing and executing contracts with customers, clients, and other businesses you interact with. It is a process that must not be taken lightly. Contracts are the lifeblood of any successful business, and they are key to maximizing operational and financial performance and minimizing potential risks. 

This blog post will walk you through everything there is to know about mastering the contract management process.

What Is The Contract Management Process?

The contract management process is the process of creating, executing, and analyzing contracts to maximize operational performance and reduce liability.

Businesses handle different types of contracts when forming strategic relationships with clients, employees, contractors, suppliers, and industry partners. The contract management process ensures that all of these contracts are executed properly. 

The purpose of all contracts, no matter their specifics, is to get work done and keep the business going. Successful contract management ensures that all transactions will remain beneficial to the business, with all interested parties delivering what is expected, on time and as agreed.

Stages of the Contract Management Process

1. Planning

Planning is the first stage in the contract management process. It is all about getting organized for contract preparation and creating a contract management strategy that can ideally be applied company-wide. 

You must answer the following questions during this initial planning stage:

  • What are the types of contracts that you need to manage?
    • What is the volume of the contracts?
    • Can you streamline operations by using standard agreements or contract management software?
  • Who is responsible for managing each stage of the process?
    • What do they need to perform their job?
  • What common issues do you need to prepare for?
  • What resources are needed to implement the strategy?

The length of the planning stage depends on the size of your business, your industry, the complexity of the contracts you need, your set business rules, and the risk management elements you face.

Creating A Contract Management Process Flowchart

Part of the planning stage involves creating a flowchart for a bird’s eye view of the process. Assign a specific person or department to each stage so you can easily identify and correct bottlenecks.

2. Implementation

How can you implement your plan?

  • Find people who will make your plan work.
  • Provide resources for each step of the process.
  • Identify who is responsible for each step and how much time they need to complete it.
  • Establish a schedule to keep you on track.
  • Closely monitor each stage of the contract management process and make sure that deadlines are being met.

Look into contract management software that can streamline your approval workflow and manage each step of the process.

Onboarding is an important part of the implementation stage. It will ensure that everyone involved has the necessary information and training to perform their job. Your contract manager should make sure each team member understands what they are responsible for.

3. Pre-Contract Stage

Next, you must get all of your contracts and agreements in order. Look into standard agreements and contract templates you can use to mitigate risk throughout the entire lifecycle. Hand-drafting contracts is a time-consuming task, and you may be better off using contract management software for a seamless contract creation process.

The biggest challenge of this stage is creating the right contracts that will meet your needs and reduce legal and financial risks. Consult with your legal department to create pre-approved templates that contain all required terms and clauses. Contract approval may also be accomplished by stakeholders.

4. Handover

In many companies, the individuals authoring contracts are often not the same people who execute them. The handover process is crucial, as the assigned negotiator must understand all the important elements of the contract they will be presenting to the other party.

A thorough walkthrough of the critical contract information will ensure that contract negotiation and contract administration will go smoothly.

5. Contract Stage

This is where the goals of your contracts are realized. You can expect your employees, clients, suppliers, and partners to operate under the terms of the professional agreement you’ve established.

The contract stage depends entirely on smooth planning and a thorough pre-contract stage, so do not take the previous steps for granted just to get a contract on the table.

6. Pre-Renewal

The entire contract lifecycle doesn’t end after signatures and notarizations. You must ensure that your contracts are executed properly throughout the agreed-upon period, and terms must be re-evaluated before the contract renewal stage.

Evaluating contract performance involves looking through the agreement with fresh eyes to determine if adjustments need to be made and identify renewal opportunities. This will help you decide if you should renew the terms or create a new contract.

7. Post-Contract

You must ensure that all contract terms are met by the parties involved and that there are no loose ends at the conclusion of the contract cycle time. This can mean anything from collecting final payments, double-checking deliverables, auditing overall performance, and more. 

What Are The Objectives Of Contract Management?

Good contract management is all about keeping your business running smoothly. Having robust contracts in place will prevent compliance issues with all the parties connected to your operations. 

Contract management ensures that all of your contractual obligations are met, and that you can maintain good business relationships with all the entities with whom you have created legal agreements.

Successful contract management makes risk mitigation easy. For example, a warehouse business efficiently managing contracts can easily track down pending deliveries from its suppliers. With clear obligations, the warehouse ecosystem can function like clockwork and avoid missed deadlines and financial penalties.  

Contract Management Process Best Practices

Contract lifecycle management best practices can help you create and execute all types of contracts. 

Tips for Effective Contract Management Processes

Here are some of the best tips for effective contract lifecycle management:

1. Make It Your Top Priority

For contract management to be successful, it has to be a top priority. You must set aside enough time and resources to ensure that each step of the contracting process goes smoothly.

2. Get Everyone Involved

Contract managers are not the only ones responsible for the contract process. Everyone must be on board to make sure contract lifecycle management remains hassle-free. 

All team members must have a clear understanding of their role in the process and how to complete their assignments. A healthy contract management process also includes open lines of communication from top to bottom. 

3. Use a Contract Management Tool

Contract management software like Signaturely can make implementation easy, and minimize any errors on your part. With high-end software, you can easily see if all of your contract data is correct.

Robust software will make document management a breeze, so you don’t have to do anything manually.

4. Store Documents in the Right Facility

Contract repository is an important element of contract management. Handling, storing, and retrieving reams of documents can be challenging—you can’t just put everything in one filing cabinet. You must know where and how to find all your contracts for easy access whenever you need to look up terms laid out in a specific agreement.

Aside from ease of access, you must prioritize security in your central repository.

5. Standardize Your Process

Prioritize the planning stage of the contract management process, as it will make everything easier for you in the future. Lock down pre-approved templates for your common agreements and develop a standard method for original contract creation that your organization can execute without a fuss.

Make Your Life Easier With Contract Management Software

With the help of contract management software, you can easily get your contracts and agreements in order. Here’s how:

Free Contract Templates

Contract management software like Signaturely offers you access to a library of free templates. This means you don’t have to go through the trouble of creating or designing contracts on your own. You can download any of our free contract templates and get started right away.

Contract management software like Signaturely offers you access to a library of free templates.

Introducing Signaturely – The Best Contract Management Software

With Signaturely, you can easily:

Generate Contracts

With the help of contract management software like Signaturely, you can customize as many contracts as you want and organize them into portfolios so they’re easy to find.

Keep Track of Files & Documents

You may need to refer back to a certain file or related documents several times throughout a client or supplier relationship. Signaturely streamlines this process so you don’t have to go through so many steps each time.

Sign Documents in Under 5 Minutes

The team at Signaturely created a simple and easy-to-use platform that ensures your electronic signatures are uploaded in under 5 minutes. You can set automated alerts to signers that don’t send the contract back within a certain period, and you can easily track pending, signed, or unsigned documents in one centralized dashboard.

But that’s not even the best part. This contract management solution offers a free for life plan that you can use to attach electronic and digital signatures to your contracts. 

Get started on managing contracts the right way. Create a free Signaturely account today!

Common Questions About The Contract Management Process

Take a look at some of the most commonly asked questions about contract management below:

What are the challenges of contract management?

One of the biggest issues contract managers face is staying in the loop. With so many moving pieces in the equation, you can easily lose track of what stage you’re in. 

This is where software like Signaturely comes in handy. You can streamline your operations and keep a close eye on each step of the contract process with ease.

How can contract management be improved?

The old-fashioned contract drafting process is too time-consuming and eats up too many resources.

Using software like Signaturely will help move things along at a faster pace and ensure your contract management system is as efficient as possible.

What You Need To Remember About Contract Lifecycle Management

You need to make sure your business runs as efficiently as possible. This is why all team members must be on the same page when it comes to contract management.

With the help of high-end software like Signaturely, you can ensure your team is in the loop with minimal effort on your part.

Make sure you’re following best practices and managing tasks efficiently with the help of a team-based document management solution like Signaturely.

Create a free Signaturely account today!

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