Improve approval lead time with processes
Traditionally, a contract could take weeks or even months, as different levels of input are consulted across your organization and your vendors’.
This is a setback you’ll want to avoid as much as possible. Vendor contract management designed with modern tools ensures that you and your vendors can reach agreements quickly and get down to working.
Using pre-built processes, vendor management software can alert contributors and automatically move data around without direct human input.
Ensure contract compliance with periodic reviews & audits
Managing a contract goes beyond the moment it’s signed. It’s important to ensure both parties stay compliant with the stated provisions in the long-run.
That’s where reviews come into the big picture. Ideally, contract management should plan ahead for periodic performance reviews that will be factored in to determine whether the customer-vendor relationship should continue.
Instead of bearing damages until a contract term runs out, performance reviews written into a contract can help determine whether both parts have been amenable to the agreed terms and as a result, help keep vendors compliant.
Improved security
Managing contracts across MS Word and email might be a solution that works for your business on the fly.
But it’s definitely not the most secure solution since both (Word docs & email) don’t offer enhanced security protocols required for keeping such confidential agreements secure.
Vendor contract management systems designed around the use case offer better security that’ll keep you and your vendors’ data secure.
Increases spend visibility & reduces maverick spending
Maverick spending occurs often when employees need a particular supply but there’s no contract they can identify that covers its supply.
There could be a contract in place already, but as long as it’s not instantly visible when needed, employees will opt for the easy way out.
They’ll order what they need from any random vendor right away.
And maverick spending, which is simply acquiring supplies on a whim, tends to hurt an organization’s internal operations and waste procurement funds on double purchases.
Managing all your contracts in one place makes it easy to keep track of them.
Employees can stay updated on supplies that are covered by existing contracts and only purchase from those vendors.
Vendor contract management best practices
There’s no switch or lever tagged “Vendor Contract Management” you can simply flip and get everything to fall into place.
Rather, it’s an ongoing process you need to keep engaging to ensure both sides are compliant to terms and that your customer-vendor relationship stays productive in the long-run.
And there are several tips you can apply to make the process efficient and productive, such as:
Plan with a very clear process
A contract is a sensitive document that determines how a relationship between you and your vendors will run.
It lays out the terms and obligations of both sides.
Now, a lot of work goes into creating a contract, such as reviews, notifying authorized signatories, including key provisions, adjusting terms as the need arises.
All this isn’t what you can manage off the top of your head. Rather, you need a process you can always tick off every time you create a new contract.
Better still, an automated contract management tool automatically moves your contracts through the required stages, notifies all those whose input is required, and stores the finished document away when it’s done.
A process gives you a scalable step-by-step pattern you can use every time to create functional contracts that work for you and your vendors.
Manage and store all your contracts in one source of truth
Instead of scattering documents across folders and local devices, storing your contracts in one place is undoubtedly a better option.
A single contract repository makes it easy to keep track of contracts, key dates in their lifecycle (e.g. Expiration dates), and provisions that need to be kept as outlined.
