This is incredible given the thousands (or hundreds of thousands) of contracts that control the operations of large companies. Managing so many legal documents effectively can be difficult, and mismanagement can be a costly mistake to the organization. In fact, according to a study by the International Association for Contracts and Business Management (IACCM), inefficient contract management can reduce a contract’s value by 9.2%.
So how can businesses improve contract management?
The answer is a combination of good contract managers and effective contract management software. Businesses need to draw on the expertise of contract managers to manage the day-to-day tasks associated with the contract management lifecycle. Contract managers are responsible for simplifying the creation, negotiation, execution, compliance, storage, and updates between all departments in an organization and typically rely on contract management software to streamline the process.
What is the daily job of the contract manager?
Contract managers are at the service of all companies, departments, and employees involved in implementing new legal contracts. They are the central point of contact for all parties throughout the process and, ultimately, those who ensure timely execution, full compliance, and secure storage of all contracts across the enterprise.
The actual day-to-day responsibilities of a contract manager can vary widely depending on industry and company size, but here is an overview of the standard tasks associated with contract manager roles:
- Collect business requirements for new contracts.
- Display and share a red line between the two parties while managing the draft version.
- Facilitates legal discussions on open contract issues.
- Negotiate prices and insurance requirements directly.
- Define an approval chain and record approvals from each internal stakeholder.
- Send the final contract for signature.
- Manage Contract Library – Store, organize and retrieve all contracts securely.
- Track automatic renewals and expiration dates.
- Ensure compliance with the main dates and conditions of compliance.
What skills do contract managers need to have?
Contract managers must have a full set of skills to interact directly with many different departments. While business, financial, legal, selling, buying, and buying practices are helpful, certain qualities can really make an individual stand out in this position.
Contract managers need a complete understanding of the business and the industry. As the first line of defense in the contract review process, contract managers must be able to quickly enter new areas and become experts in new products and services. You must also be in full compliance with the expectations and principles of your business.
Negotiating terms, guiding others, and managing work processes all require good people skills. Contract managers need to be influential, motivated, and cute. You need to be able to communicate with everyone from salespeople to executives and be able to deliver under high pressure. A good sense of humor will help.
Attention to detail
The contract is difficult to read. Anyone who reviews the contract knows that the details of the contract should be given special attention. The contract manager should exercise sufficient caution, patience, and vision to fully review the entire legal document from start to finish and fully understand the terms and conditions stated in the contract. Being able to find errors and unfavorable conditions is very important.
The contract manager should be responsible for new contracts and manage renewals of existing contracts. This results in heavy workloads every year. To execute contracts well without being overwhelmed, you need organizational skills to manage dozens or hundreds of contracts at different stages of the contract lifecycle. They need to find contracts quickly, plan for important dates, and keep trading and execution activities on schedule.
Contract negotiations can last for months or even years, and the various stakeholders involved in this process can feel happier when large sums of money are spent. Contract managers need to be emotionally intelligent and able to act logically. They also face significant internal pressures, need to close deals quickly, make quick decisions, and balance risk management with speed to market.
When it comes to protecting a business from legal risks, contract managers are the first line of defense. Contract managers need to fully understand its risk tolerance and ensure that it is adequately reflected in all legal documents. Whether it’s getting final approval, negotiating specific insurance requirements, or simply understanding a supplier’s reputation, the contract manager must be able to manage risk on behalf of the company.
How can contract management software help you?
No matter how skilled contract managers are, there isn’t much they can do without effective contract management software (CMS). A good CMS helps companies automate many manual processes, from versioning, searching, saving, reporting to digital signatures. Quality CMS allows contract managers to speed up the creation, negotiation, and execution of contracts. This improves operational efficiency, reduces expenses, and increases revenue.
The contract manager should also not be the contract librarian. Automation software solutions such as ContractSafe.com can help. Some contract manager solutions provide cloud-based contract repositories with advanced search capabilities and user privileges. This provides qualified employees with read-only functionality, allowing them to search for contracts only in seconds. Asking a contract manager to save or retrieve a contract manually is neither a good time nor a productive way.
Some platforms also offer the option to set recurring email or calendar reminders to keep contract managers ahead of key contract dates and not miss automatic renewal dates or expiration dates. This helps organizations manage their risks and renegotiate their downsides before the downsides.
Contract manager solutions are also a powerful tool to help contract managers stay organized. With customizable reports and configurable dashboards, contract managers can use the contract management solutions to gain insight into spend, vendor management, and contract terms and dates. This not only helps contract managers keep working but also provides transparency and visibility across the organization.