Customer contract management is not a CRM task; it is a C-level responsibility, because the consequences of non-compliance in contracting are far-reaching and severe. Those supervising large capital contracts face personal risk, as well as risk to the organisation for death and personal injury, and poorly managing contracts directly affects the likelihood of litigation occurring and impacts on reduced revenues and profit margins.
Contract lifecycle management software on the sell side helps us get a better handle on what our organisation has committed to in customer agreements by providing visibility and access to agreements and pre-emptive alerts as trigger points approach. This mitigates our risk of non-compliance.
Quite probably you are not the person who negotiates and drafts the contracts in your organisation, but you manage customer accounts. If this is the case, then there may be important clauses in customer agreements that you need to know about, but don't. One such clause is a possible right to raise the value of a contract by CPI every 12 months. There will be a limited opportunity before a contract rolls over into a new period where you are required to give notice that you are increasing the value of the contract, and if you miss the cut-off date, then you miss the revenue. There are many other possible reasons for cost increases that you may need to pass on, and these all have notification deadlines.
Compliance to customer contracts is business critical. Are you delivering what you have promised? (Remember a promise is a contract and vice-versa). If you don't have a system that monitors deliverables and milestones, then you may not be in compliance with your commitments, and how would you know? You would not know until your customer tells you so. Delays and non-delivery can mean it takes longer to get paid, or you don't get paid at all.
You may be liable to pay liquidated damages for late or non-delivery. Non-compliance can also lead to termination of a contract, and possible litigation, potentially costing your organisation millions in lost revenue and damages.
Contract lifecycle management can help to manage the risk of non-compliance to your sell-side contracts by automating contract management processes and electronic approval routing. Contract lifecycle management can corporatize contracting processes and help your staff perform key tasks, providing detailed process checklists and templates, that provide corporate consistency, accountability, and auditability.
The biggest risk is not knowing what your commitments are. How can you manage your risk if you do not even know what contracts you have? How long does it take you to locate a contract, its amendments, history, and associated correspondence and file notes? Sounds like it?s time to put in a system.
Contract lifecycle management software on the sell side helps us get a better handle on what our organisation has committed to in customer agreements by providing visibility and access to agreements and pre-emptive alerts as trigger points approach. This mitigates our risk of non-compliance.
Quite probably you are not the person who negotiates and drafts the contracts in your organisation, but you manage customer accounts. If this is the case, then there may be important clauses in customer agreements that you need to know about, but don't. One such clause is a possible right to raise the value of a contract by CPI every 12 months. There will be a limited opportunity before a contract rolls over into a new period where you are required to give notice that you are increasing the value of the contract, and if you miss the cut-off date, then you miss the revenue. There are many other possible reasons for cost increases that you may need to pass on, and these all have notification deadlines.
Compliance to customer contracts is business critical. Are you delivering what you have promised? (Remember a promise is a contract and vice-versa). If you don't have a system that monitors deliverables and milestones, then you may not be in compliance with your commitments, and how would you know? You would not know until your customer tells you so. Delays and non-delivery can mean it takes longer to get paid, or you don't get paid at all.
You may be liable to pay liquidated damages for late or non-delivery. Non-compliance can also lead to termination of a contract, and possible litigation, potentially costing your organisation millions in lost revenue and damages.
Contract lifecycle management can help to manage the risk of non-compliance to your sell-side contracts by automating contract management processes and electronic approval routing. Contract lifecycle management can corporatize contracting processes and help your staff perform key tasks, providing detailed process checklists and templates, that provide corporate consistency, accountability, and auditability.
The biggest risk is not knowing what your commitments are. How can you manage your risk if you do not even know what contracts you have? How long does it take you to locate a contract, its amendments, history, and associated correspondence and file notes? Sounds like it?s time to put in a system.
About the Author:
Adam McInnes is the CEO of Open Windows Contracts, an innovator in contract lifecycle management software. Open Windows offers a trial of their contract management software and further information that you may be interested in.
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