How Small Businesses Can Avoid These 3 Contract Management Mistakes

Effective management is critical to running a successful business, and this necessitates strong oversight for every facet of a company’s operations. Unfortunately, a company’s leadership team often becomes embroiled in a few discrete matters to the detriment of many others. Some aspects of a business may be overlooked from time to time without consequence, but contract management is not one of them. Contracts impose binding, legal obligations and can have some pretty significant financial ramifications, especially for smaller businesses with fewer resources at their disposal. As a result, crafting a coherent contract management strategy and implementing a practical contract management solution are vital to averting a potential disaster. Here is how the right contract management solution can help small businesses avoid these far too common contract management mistakes:

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Why Contract Repositories Should Store More Than Contracts

For companies that engage in high volume contracting, establishing an online contract repository is a necessity. As more contracts are added to a portfolio, organization will be crucial to keeping tabs on everything and staying sane while doing so. Obviously, an online repository serves as a centralized database, ensuring that the whole portfolio is safely located in one place, but it can and should do more than merely store contracts. Companies should look for a contract management solution with purpose-built features that facilitate oversight and ensure that they utilize the repository to the fullest extent possible by using it to track the following:

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The Buyer's Guide to Contract Lifecycle Management Software

Let's face it: juggling hundreds of contracts at once isn't most people's idea of a good time. However, if you work as a contract, legal, or procurement executive, or have an administrative role that requires you to stay on top of contracts within your organization, then you're all-too-familiar with the struggles that come along with this type of work.

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Contract Management and Technology: An Inseparable Duo

If you are a contract manager and your company has not invested in a contract management solution or is using an outdated, bulky, or inefficient system, there is a good chance that you are wasting more than just your valuable time. Failing to use the appropriate technology can stall operations, lead to cost overruns, and plague overall efficiency. These days, effectively managing a contract portfolio requires utilization of a sophisticated contract management solution that facilitates the following:

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Contract Interpretation and the Importance of Unambiguous Terms: Part 1 of 3

Most folks in the contracting world would agree that contract drafting is an art form. The negotiations involve a lot of push and pull in an attempt to find balance and stable ground, but it is the language of the contract itself that must clearly explain the precise bargain that was struck. As a result, the individuals who turn the negotiated terms into the actual words that make up the contract, usually attorneys, must carefully analyze every single word, sentence, paragraph, and piece of punctuation.

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Analyzing the Cost of Poor Contracting

Poor contracting can take many forms. It may relate to imbalanced negotiating power, hasty and careless drafting, or inadequate oversight during performance. Regardless of when or why a contracting relationship deteriorates, there are going to be negative consequences for both parties, and this impact is always detrimental to the companies' bottom line. According to the International Association for Contract and Commercial Management (IACCM) “the average cost of poor contracting is 9.2% of an organisation's annual income - and even higher for large capital projects, up to 15% of the contract value.” Here are some of the costs associated with poor contracting and ways to avoid them:

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