It can be mind-boggling to think about the thousands of processes and tasks that happen in the back of a company’s business operations. One such process is contract management. Effectively managing a large volume of contracts can be a challenge, and doing a poor job of it can be a costly mistake. In fact, a study by the International Association for Contract and Commercial Management (IACCM) suggests that inefficiencies in contract management can erode contract value by 9.2%. So exactly how does a contract manager improve contract management?
Businesses must rely on the expertise of contract managers to handle the day-to-day tasks associated with the contract management lifecycle. Contract managers are responsible for streamlining the creation, negotiation, execution, compliance, storage, and renewals across all departments within an organization, and are often reliant on contract management software to facilitate the process.
From contract requests and creation through execution and renewal management, contract managers have the critical role of ensuring contracts make it through every step of the process, contractual obligations are met, clients and vendors are kept happy and contracts remain profitable for the company.
Why is a contract manager important?
Contract managers serve a liaisons between all companies, departments, and employees involved in the execution of a new legal agreement. They’re the central point of contact for all parties throughout the process, and at the end of the day, they’re the ones responsible for ensuring the timely execution, overall compliance, and safe storage of all contracts throughout the enterprise.
While the actual day-to-day responsibilities of a contract manager can vary greatly depending on the industry and the size of the business, below is a high-level list of the standard tasks associated with a contract manager role:
- Gathering business requirements for new contracts.
- Reviewing and sharing redlines between both parties, while managing draft versions.
- Facilitating legal discussions around unresolved contract issues.
- Directly negotiating pricing or insurance requirements.
- Defining the approval chain and documenting approvals from each internal stakeholder.
- Sending finalized contract out for signature.
- Managing the contract library – securely storing, organizing, and retrieving all contracts.
- Tracking auto renewal and expiration dates.
- Ensuring key compliance dates and conditions are observed.
In recent years, the role of contract management has evolved to include contract management software and tools for automation. Contract management software supports contract managers by helping them maximize the software’s capabilities as their role becomes increasingly important.