Key Benefits of Contract Administration

In previous posts, we’ve talked about how contracts are an important part of administering your business operations and how contract management software is a leading tool to help you stay organized, up-to-date, and maintain quick and easy access to your most important documents.

If you stop for a moment and really think about the significant influence contracts exert on your business, you cannot dispute the importance of accurately managing them through their entire lifecycle. Maybe that’s why you are investigating – or have even already purchased – contract management software. But implementing such a solution isn’t just about importing contracts to have electronic copies and then maybe setting a few alarms to remind you of key dates. To proactively reduce risk and business liability, and maximize operational efficiency and profitability, you need to practice effective contract administration – the ongoing governance of each contract.

Contract Administration Defined

Contract administration is comprised of a broad range of ongoing tasks including common ones such as:

• Contract maintenance and change control
• Charges and cost monitoring
• Ordering, payment, and budget procedures
• Resource and asset management and planning
• Management reporting

A full-featured contract management system can help you and your team reduce the complexity of and time to complete these tasks, resulting in administrative cost savings for your bottom line.

Dedication to proper contact administration helps to ensure the success of each contract and also protects the goodwill relationship between you and your customer, service provider, or other contracted party. By following clear administrative procedures during the full lifecycle of each contract, you can minimize misunderstandings or confusion over who is responsible for doing what, in which specific manner, and when it should be done and how often.

Contract Maintenance and Change Control

As personnel, business environments, and other circumstances change, the actual contract documentation must be updated to accurately reflect any new arrangements. The ability to authorize different types of changes is often delegated to different people and seniority, so there should also be documented internal procedures to dictate those responsibilities.

To be sure keeping documents up to date does not become a burden, contract management software can make it easy to quickly search for and update language needing to be updated. If a simple method is available, employees are more motivated to make the updates in the documents in a timely fashion, ensuring your business has consistent documents accessible on a company-wide scale.

Management Reporting

If you don’t continuously report on the performance on your contracts, you squander your efforts during the negotiation process! Depending on your management structure and preferences, contract administrators may be required to report on the full spectrum of contract performance metrics, or should only deliver reports and notifications when exceptions are discovered. This information flow should happen from the very start of the contract lifecycle to facilitate trend analysis and contribute to any necessary renegotiation points at critical milestones.

Please share any tips you have for contract administration in the comments below!

If you’re currently in the market for a contract management software solution, consider Contract Assistant™. With Contract Assistant, users in organizations of all sizes can manage their contracts and negotiated agreements with confidence by quickly accessing information, generating reports, receiving automatic reminders of critical dates, and more. Contract Assistant is available in single-user Standard Edition, multi-user PRO Edition, and powerful, SQL-based Enterprise Edition.