According to a study by the National Association of Contract Managers (ANGC), 90% of directors at Brazilian companies say they do not have an efficient service contract management policy.
Also according to the survey, 78% of companies do not have a contract monitoring method, and 90% still handle this control via email.
This represents a major risk to the financial health of companies, whether large or small.
But do you know what service contract management is?
Service contract management goes beyond filing and document control. With good management of this process, you can also track the document's life cycle — from creation, through execution, until the end of its term.
Financial and project management are safeguarded by this process, which guarantees the contracted benefits for both parties. With contract management, you can monitor and track every stage in detail.
Efficient management without headaches
An IBGE survey revealed that 6 out of 10 companies close their doors before reaching 5 years. When we analyze the consequences of poor contract management, we can consider it one of the possible causes.
Good service contract management contributes to the growth of your business, as it makes organizing agreements easier, improves document control, and speeds up financial actions.
Some of the benefits of good contract management are: ease in understanding the actions and strategies of both parties, effective monitoring and supervision of the obligations set out in the contract, and cost reduction through better control of expiration dates.
Get to know 3 practices that will help you control contracts
You need a plan! For effective contract management, you need to plan even before closing a contract. That is why we have listed 3 PRACTICES below that will help you better control all your documentation:
Regular reporting
Issuing management reports is essential for precisely tracking everything that is happening with the services agreed upon in contracts.
You can set up weekly, biweekly, monthly, or annual reports according to the needs of the products or services sold. For example, if you hire suppliers based on price, you need to generate reports more frequently, since this kind of service varies a lot from one supplier to another, which can lead to the cancellation of a contract or to changes in certain clauses.
Managing agreements and deadlines
It is not enough to simply store contracts in folders or scan them to your computer. You need an internal routine that lets you follow the contract's stages and deadlines to ensure the agreement is being fulfilled at every step.
During the term of a contract, unforeseen events may arise — related to the economy, for example — creating a contractual disadvantage for one of the parties. In a situation like this, a review is needed to determine whether certain conditions should be relaxed or changed.
Less time spent on management
You can take advantage of technology to move away from paper contracts and gain much more agility when searching for documents. Maintaining paper-based document management requires reams of paper, printer cartridges, and other expenses that can be eliminated by using 100% digital contracts.
An electronic contract can be signed much faster and more securely, since it is protected by cryptographic resources and stored in a private cloud. Another convenience of using electronic contract systems is being reminded by alerts about changes to clauses or approaching deadlines.
Whether managing service contracts with suppliers or with customers, you need to pay attention. Successful management must ensure the company complies with what was agreed in the document. With management software, you can draft, manage, and negotiate contracts.
Originally published in Portuguese at useall.com.br.