Contracts are part and parcel of any functioning business. Effectively managing agreements is critical for any organization, whether you’re part of a small business or a large corporation.
A contract management checklist can be invaluable as it helps you take all necessary steps when managing contracts. This article will explore the importance of contract checklists and provide tips on creating and using them professionally.
Whether you are new to contract management or an experienced pro, this article will provide valuable insights and information to help you better manage your contracts.
Table of Contents
- The Importance of Contract Management Checklists
- Checklist For Contract Initiation
- Checklist For Contract Approval and Execution
- Checklist For Contract Tracking
- Try Fill For Effective Contract Management
The Importance of Contract Management Checklists
Contract management checklists are essential for several reasons. Some of the key benefits of using this tool include the following:
A contract management checklist can ensure that you take all required steps in a timely and efficient manner, saving time and resources for your organization.
Following a well-crafted checklist can reduce the risk of errors or omissions, which can help prevent disputes or other problems.
On a related note, a contract checklist ensures that all parties know their responsibilities and obligations. This awareness can improve communication and help prevent misunderstandings.
Entities covered by various industry regulations can use checklists to meet all regulatory requirements related to contract management.
Checklist For Contract Initiation
The beginning of the contract management process is often the most challenging and time-consuming. However, the effort you put into this stage will dictate the quality and success of your contracts. Let these points guide your process in the contract initiation phase.
1. Identify the need for a contract
Determine what goods or services you need and whether you require a contract for a particular engagement. Some deals may only necessitate an informal agreement, while others need a legally-binding contract.
2. Develop contract requirements
Define the terms, conditions, and requirements your organization must include in the contract. Aim to be as specific as possible, as this stage will set the tone for the rest of the contract management process.
3. Identify potential vendors
Research and compile a list of potential vendors to provide the required goods or services. Select a vendor that would suit your needs and mesh well with your organization.
4. Request proposals
Send request for proposal (RFP) documents to potential vendors and specify the requirements for the contract. You may request general documentation or a more detailed technical proposal depending on what you want to see.
5. Review proposals
After receiving the proposals you commissioned from selected vendors, review and evaluate them to determine the best fit for your organization. You would do well to have pivotal people in your firm view the documents to ensure any contract signed meets company standards.
6. Select the vendor
Choose the vendor that best meets your organization’s requirements and begin negotiating the contract terms. After this point, you’ll enter the next stage of the contract management pipeline: approval and execution.
Checklist For Contract Approval and Execution
The following contract management checklist involves the most crucial components of your strategy. You must create, review, and execute a viable contract that benefits all parties involved. Follow this contract checklist to implement successful agreements.
1. Draft the contract
2. Review the contract
Carefully review the contract to ensure that all terms and conditions are acceptable and accurately reflect the agreement reached with the vendor. Depending on your organizational structure, you may need multiple people to examine the contract specifics.
3. Obtain necessary approvals
Obtain approvals from relevant parties, such as your organization’s legal counsel or upper management. Larger businesses typically have a longer approval process than their smaller counterparts, so allot the appropriate time for this step.
4. Negotiate any necessary changes
Negotiate with the vendor regarding any changes or modifications you might need to include in the contract. These updates may include deliverables, pricing, timelines, and other relevant terms.
5. Execute contract
Sign the contract and ensure all concerned parties have a copy of the executed agreement. After this point, you will have to inform all relevant personnel from your organization who are central to handling the contract terms.
6. File and document the contract
File and document the contract properly for future reference and excellent record keeping. In addition to paper records, you should consider storing the agreement in a secure cloud storage service.
7. Communicate with the vendor
Establish clear lines of communication with the vendor to ensure that each party consistently meets the contract terms. Effective communication can spell the difference between successful and mediocre contract management.
Checklist For Contract Tracking
Once the agreement is up and running, you must continue to track how it affects your organization. If particular components are not working for you, you may make adjustments to ensure the contract benefits your firm. Follow this contract checklist for tracking purposes.
1. Monitor performance
Track all metrics stipulated in the contract, which may include performance milestones, deadlines, and other key performance indicators (KPIs). Monitoring these figures will help ensure you’re on the right path.
2. Review and process payments
Examine and execute invoices and payments under the contract terms. Make sure to follow the schedule written in the agreement to avoid any complications or possible breaches of the contract.
3. Document any contract changes
Get any updates or modifications to the contract in writing and obtain the necessary approvals. Typically, one party may not modify any part of a contract without the express consent and acceptance of all other signatories involved.
4. Assess the contract’s effectiveness
Evaluate whether the contract meets the needs of each party as the agreement runs its course. Arrangements in business only make sense if they tangibly benefit everyone involved.
5. Prepare reports
Draft any necessary reports or documentation for internal stakeholders or external partners. Reporting is a crucial way to determine the viability and impact of an ongoing contract.
6. Maintain data privacy
Secure the contract and its contents by maintaining data privacy at all times. Failure to do so can open you up to legal disputes from other parties involved in the contract.
7. Renew or terminate the contract
Monitor the contract’s expiration date and remind the necessary people to renew or terminate the agreement. You may choose to renew the contract if its performance is acceptable. You could also end the arrangement if it does not benefit your organization.
Try Fill For Effective Contract Management
Contract management can be a tricky endeavor. There are plenty of things to consider, and neglecting even one could compromise your potential agreement. The contract management checklists we’ve shown you are a great start, but you can do better.
That’s where Fill comes in. As one of the leading eSignature platforms in the market, Fill provides users with powerful contract management features. The convenient web app allows you to create, manage, and sign contracts effortlessly.