Contract Management For Small Businesses 101

17/01/2023 6:42 AM

When running a business, you must handle various types of contracts and agreements between customers, suppliers, and employees daily. Although it might sound ambitious at first, deploying an effective process can significantly help eliminate much of the manual work that is associated with contacts. When you automate organizing paperwork, document tracking, and documents for signature, it will free valuable time for tackling more important tasks and taking advantage of opportunities.


If contracts aren’t conducted properly, it can create risk and damage within a small business and negatively affect its business performance. Businesses need to pay particular attention to contract management, especially small ones, as the number of contracts may increase suddenly and they should have a system in place that will be ready for any growing number of contracts. For instance, DocuSign is a great option.  However, if your budget is too tight, you can search for the best DocuSign alternatives to find a better solution for your needs.


Below, we share what contract management for small businesses means and how it can help you streamline your processes.


Stick To a Plan

When launching the contract management processes within your business, you must ensure that you have a plan for each contract. This plan should include three main steps; creation, execution, and maintenance.

Having this type of structure in place will ensure that the process runs flawlessly and that each contract will follow the same processes.


Maintenance is considered to be the key element and the plan must include continuous reviews. Also, make sure to remember your goals for the business; plan and record them when you meet them along the way.


Make Effective Decisions

Consideration is crucial during the contract management processes. It is necessary throughout the first stages of contract creation when deciding if the individual can meet the obligations. It is also important to consider how the contract will operate over time and plan for unexpected outcomes.


Ensuring that a business has carefully thought through the reasons for making a contract and whether the contract will run as expected is essential to ensure that the company reduces any foreseeable losses.

In addition, thinking about what a company will do if a contract has any issues is just as important. Planning for unexpected problems allows a company to be prepared and thus minimize losses.


Have Regular Compliance Reviews

Pexels


Conduct regular compliance reviews if you want to make sure your small business is enjoying all the benefits and terms that are set out in contracts. Such reviews will help you manage the costs set in the contract and the risks that come along.


These reviews will gather the information that will be helpful for the parties going forward and how to better their relationship. You must keep an eye on KPIs (Key Performance Indicators) and organize regular meetings with employees and other associates to ensure they’ve met their performance goals. During these meetings, you can also address and discuss any problems or concerns the employees may have with their contractual obligations.


Lastly, during this stage of contract management compliance, it is important to pay attention to any unrecorded liabilities, overpayments, or under-reported revenue.


Save Time with Templates

If you’re sending out loads of contracts, then you should consider using templates that will save you and your team precious time. Equipping your small business with handy templates for every situation will ensure that your contract management process runs smoothly.


You’ll make sure that your small business contracts are consistent and include all the important elements while not spending hours crafting the same document. This is especially useful for startups as templates will allow you not only to save time but also money in the legal departments.


You should keep your contract templates appropriately structured, clear, and simplified. It should cover all the basics to ensure that there are no loopholes in legal obligations and it should be easily edited for different contracts.

Remember to review these templates when new changes are made to contract law or when changes within a particular contract need to be updated.


Focus on Effective Communication

Pexels

When running a small business and managing contracts within it, you must focus on communicating effectively with all partnerships and contractual relationships. Open communication will pave a path forward and ensure that the parties are content with the contractual relationship. They’ll also feel comfortable enough to ask questions that will further build trust and develop

transparency.


In addition, if there are issues within your contractual agreement, this should be communicated in good time to preserve the professional and proactive dynamic of the relationship.


Final Thoughts

Contact management can be tedious but with the tips we provided, you can make the entire process simple and effective for your small business, while avoiding risks and improving business performance.

Nicholas Mushayi
Super User
This article was written by Nicholas a Super User at Industrial Psychology Consultants (Pvt) Ltd

Related Articles


Notifications

Sign up now to get updated on latest posts and relevant career opportunities