Important Contract Management Considerations
Is your business set up correctly to engage your potential customers and start realizing potential revenue? Managing contracts is an extremely important part of the selling and prospecting process, and businesses should pay close attention to contract management to avoid potential risk, and payment issues. Furthermore, this will help businesses not only increase or maximize the revenue from the agreement, but also maintain compliance and business standards.
Important contract management considerations to focus on are:
- Is the contract is signed by both the buyer and seller? How do you verify, and is this implemented through a review or approval process?
- Does the agreement have an auto-renewal clause? If so, does your organization have the proper tools in place to track and manage the auto-renewal? Are you notified in advance of the auto-renewal?
- If no auto-renewal is present and the contract is near expiration, does your organization have an escalation process and involve senior management to retain the deal upon expiration or termination? Is senior management notified proactively prior to agreement termination?
- For any contract where it is near the point of a renewal (and the customer is not looking to cancel), do you have a formal auto-renewal process or procedure to capture increases, retention, and/or past due payments?
- Does your business have formal contract management software in place to help track all contracts and their start, expiration, increase, renewal dates?
By implementing a solid contract management process with contract management software, you will help eliminate issues during times of negotiation and agreement collaboration. The more you can reduce your contract management time and improve tracking and management of your agreements, the better your organization will capture and realize the revenue from these agreements.