Benefits of Contract Milestone Management
Supervising people and managing projects are not exactly easy tasks. This is particularly true when it comes to managing contracts and trying to shepherd those involved with ensuring that the contractual terms are fulfilled properly. Depending on the nature and scope of a company’s contracts, complying with the many provisions of these agreements may require the involvement of one, several, or many company employees, as well as any number of outside individuals.
Because contractual relationships can be rather complicated and tend to exist on an ongoing basis, sometimes for an indefinite period of time, it is important for companies to implement a coherent contract management system. One effective approach is to utilize contract milestone management. Here are some of the benefits of this method:
Key Dates Easily Determined and Recorded
Contract milestone management monitors contractual progress by keeping track of important milestones. In general, contracts outline the delivery of some good or service over a particular period of time, often with certain dates set for the fulfillment of some part of the contract. These dates usually form the basis of the milestone management system. Contract managers can review contracts for key dates, and with the help of an online contract management database, tag or highlight the milestones according to the prescribed timeframe.
Ideally, companies should select a contract management service provider that offers customizable alerts that generate email reminders. This provides an easy way to keep track of important milestones and greatly helps with management planning.
In addition to knowing what to expect and when, relying on milestone management ensures that there is no ambiguity with respect to important deadlines. In most cases, the milestones will serve as the deadlines for certain actions to be taken. Rather than using vague terms in a contract that create uncertainty as to when particular action items must be completed, companies should establish clear dates for completion to avoid confusion or the need for repeated extensions.
Better Workflow Management
By knowing exactly when something is supposed to be delivered and by whom, managers can use this information to plan accordingly. Milestone management that focuses on implementing and abiding by a clear timeline makes it a lot easier to delegate tasks and oversee the management of the project as a whole. Without identifying key milestones and establishing a timeframe for certain steps to be taken to ensure that each milestone is met, it becomes far too easy to delay items until the very last minute. Obviously, this leads to less than stellar results and perhaps even missed opportunities.
Simplifies Evaluation of Progress and Performance
It is much simpler to evaluate the progress of an ongoing agreement and determine whether all relevant parties are performing appropriately when important milestones are acknowledged and monitored. If for some reason a milestone is not met, managers can take steps to rectify the derailed progress and get things back on track as quickly as possible to ensure proper performance.
Improves Contract Compliance
Ultimately, by diligently monitoring contract milestones and striving to fulfill them, companies are bound to improve overall contract compliance. Of course, this saves money in the long run as it eliminates unnecessary redundancies, the imposition of financial penalties, or the loss of business due to non-compliance.