Are you surrounded by contracts? You may feel you have a good handle on these contracts. They are signed and properly stored. Likely you are also keeping track of the various contract end dates. Sure your practices may not be perfect, but it works for you. But could you get even more out of the contracting experience? Of course you can!
The management of your contracts is an important aspect of your business. Contracts are the crown jewels of every business and should be properly handled throughout the entire contract life cycle. From the initial review to the signature to the implementation to the ongoing management and finally, through the contract conclusion, understanding the contract life cycle can be beneficial to you and your business. Let’s look at what that life cycle involves as it is important for your overall contract management and experience.
Creation and Negotiation: Contracts can initially be created by either party. You may already have a standard contract or simply wait for one to be presented to you. The management of your contract life cycle can aid in this creation process. By being proactive in the terms most important to your business through playbooks, guideline creation or even a clause and template library, you will be focused on addressing and negotiating the items of importance to your business.
Post-Execution/Management: When a contract is signed, for any reason, it must not be just filed away and forgotten. This stage is about the required reporting, any auditing procedures, application of cost of living adjustments, as well as analyzing expirations and termination requirements. This allows you to not only fulfill contractual obligations, but also be proactive in ensuring the successful outcome of the business relationship.
Exit: Most people think that when a contract ends you are finished. Not always. There are many exit phase requirements to address in contracts. Will you or the other party be required to return confidential information or work products, are there any lingering fees to be paid?
You are not alone in the many responsibilities involved in the contract life cycle. In fact, when you hire a contract management company, such as ours, we assist you through each of these phases.
by Nancy Nelson