How to Solve the Problem of a Poor Contract Management Policy

Spend a little time reading up on contract management and you’ll undoubtedly come across this stat: good contract management can improve corporate profitability by nine percent of annual revenues. Flipped the other way, this figure, as reported by the International Association for Contract and Commercial Management, shows that poor contract management is costing companies significantly every year.

How can poor contract management erode company revenues and profits? There are numerous things that can occur throughout the contract lifecycle that can reduce value in big ways and small:

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Construction Contract Management: Achieving an Optimized Contract Lifecycle

There are a host of consequences when a construction project doesn’t go as planned. A single delayed shipment of supplies can cause further work interruptions, resulting in cost overruns and other issues, while compliance failures can create a slew of other problems. But because all of the relationships within construction projects are guided by contracts, effective contract management can be an important tool for making sure everything happens the way it’s supposed to.

Contract management is an organized and systemic approach to ensuring that all aspects of a contract, from deliverables and delivery dates to part and supply specifications, are adhered to during the contract term. In construction, careful contract management can help to ensure that every aspect of a build goes according to plan, and also help to reveal potential problems before they run the risk of derailing a project altogether. It is also key to keeping costs in check.

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3 Critical Steps That Need to Be in Your Contract Administration Process

Though the terms ‘contract management’ and ‘contract administration’ are often used interchangeably, they are not exactly the same thing. Contract management refers to the full spectrum of contract-related activities that occur within your organization, encompassing everything from the earliest stages of planning your approach to contracts in general, to drafting and negotiating agreements, to finally winding down and evaluating the performance of individual contracts after they have concluded. Contract administration, meanwhile, refers to a very specific phase within a contract’s lifecycle, kicking in during the post-award phase of your contract. More specifically, contract administration refers to the processes and procedures that must occur in order for business units to implement and manage a specific agreement after it has been finalized.

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3 Contract Monitoring Best Practices You Can Implement Now

While contracts are an important tool for ensuring that you achieve the desired outcomes from your business agreements, the document itself is only half the equation. Getting the full value out of your contracts requires more than just a well-crafted agreement that clearly spells out deliverables and/or services and related terms and conditions and that has been signed by all parties. A strong, properly-executed contract is essential – but equally so is a contract monitoring plan that ensures that all obligations are met as specified.

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An Expert Guide to Recognizing Revenue from a Contract with a Customer

Have you ever wound down a deal with a customer and wondered if you had inadvertently left any money on the table? There’s a good chance you have: research from the International Association for Contract and Commercial Management (IACCM) found that on average, businesses could improve revenues by nearly 10 percent simply by strengthening contract management practices.

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A Guide to Accelerating Your Contract Management Process

Better contract management is closely linked with better overall business performance, research shows: according to a report from McKinsey, a combination of sub-optimal contract terms and a failure to employ best practices for contract management can result in erosion of value equal to nearly 10 percent of total revenues annually. As such, it follows that correcting vulnerabilities that commonly occur within contract lifecycles by improving end-to-end contract management processes offers a promising tactic for improving profitability.

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Do You Know What's in Your Boilerplate Provisions? (Hint: You Should)

As the name indicates, “boilerplate provisions“ are legal clauses in a document that rely on “boilerplate“ language, often varying little between different contracts.

However, the term “boilerplate“ doesn't imply that this topic is to be taken lightly. In fact, not paying full attention to the language inside boilerplate provisions can be highly costly in terms of unpleasant surprises down the road. In this article, we'll discuss what boilerplate provisions are and why they can actually make or break a contract.

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4 Types of Breaches of Contract You Need to Be Aware Of

Breach of contract: it’s a risk faced by anyone who enters a legal agreement. If you deal with volumes of agreements (and volumes of types of agreements, from employment contracts to vendor and customer deals), chances are good that eventually you will run into a contract that doesn’t deliver on the terms agreed to by all parties.

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4 Trends Driving the State of Contract Risk Management

Anyone who uses corporate contracts will tell you that managing such agreements is really about managing risks. With that, the majority of corporate revenues are typically tied into agreements with customers and vendors, the effective mitigation of contract risk plays a major role in a company’s ability to realize the full value of hard-won business agreements. Proactive contract risk management also enables businesses to limit costs, penalties, and other fallout when things don’t go as planned.

But risk landscapes are constantly changing – for better and for worse. While some innovations can help businesses identify and contain potential threats faster and more effectively, other forces, such as shifting regulations require greater diligence than ever before.

Here are four key trends that are currently driving the state of contract risk management.

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3 Ways to Make Your Contract Management Plan More Successful

Contracts are one of the most important tools in your company’s possession for driving business results. Whether you’re talking about employee agreements, vendor and supplier contracts, or deals with customers, contracts provide a legally-enforceable framework. A framework for navigating your most important business relationships detailing everything from specifics about deliverables to important terms, conditions and backup clauses should anything go wrong.

But just because all parties sign on and are required to adhere to the terms of an agreement doesn’t mean that contracts magically deliver simply by virtue of their existence alone.  Contracts require careful, detail-oriented handling throughout their lifecycle to ensure that all parties reap the intended benefits and minimize their risks. This practice is known as contract management and having (and sticking to) an effective contract management plan provides key benefits, from a reduced risk of compliance infractions to more favorable outcomes for future contract negotiations.

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