It is often said that all large companies need contracts, as contracts are essential to their business. It seems to follow from that point they also need some sort of contract management. In order to accommodate contracts in any business, a company needs to adopt a defined protocol. In that way, there is a process by which contracts are handled.
Protocols and procedures likely include specific people who manage the contracts and handle them at specific points in the process. For example, maybe there is an intake person, a follow-up person, and the one who actually reviews and signs the contract. Many times, this is General Counsel at the company and he or she gives the “ok” for the head of the company (CEO) to sign the contract.
Understanding Contracts in the Context of Medium-Sized Businesses
It is not unlikely to expect that medium-sized companies have some sort of protocols in place for the management of their contracts. However, it is also possible that medium-sized companies that have grown from very small companies may have forgotten to take the time to strategize contract management strategies when concentrating on company growth.
Implementing the Management of Contracts
However you look at it, contract management is important. It is essential for large companies. Essential means that the large company truly cannot exist without it. But, for medium-sized companies (especially those grown from a small company size), there may be this belief that they can survive without contract management. This misconception comes from the fact that they did not need it when they were still small.
Automated Contract Management
Once there is a decision to move forward with contract management, the next step is to define the process. This involves people taking on different aspects of the contract. There is also the actual processing, that may not include people. In this case, a medium-sized company should consider using an automated contract management system.
The idea of automation, when it comes to contract management, is that it offers a solution to the identified issues that some medium-sized companies have when it comes to contract procedure(s).
Benefit 1: Memory Is No Longer the Basis For Contract Management
When you have a small company, it is easier to remember contract deals off the top of one’s head. It is not entirely impractical to use one’s memory to anticipate discussions with clients when it comes to contracts.
Or, other small, less-automated tools may be used. Someone may be using an online project management site like Trello or Basecamp to organize notes. While those are positive business practices in and of themselves, they don’t address the need for a management system for contracts. However, when it is a small business, there is not that obvious need because of the nature of the company (i.e. fewer clients, less potential for a hassle).
But to build a small business to medium-sized business, it requires more activity and attention. It usually results in acquiring more clients for the company in order to grow into a medium-sized business. When the business reaches the point of being a medium-sized company, there is much more to manage when it comes to contracts.
Benefit 2: Efficiency with Contract Access
We mentioned some online tools that may be helpful for small businesses. However, if we imagine using those same tools for medium-sized companies, it becomes complex. How does one retrieve contract details at a moment’s notice, when there is no contract stored for convenient access?
Easy access is one of the benefits that come with a centralized automated contract management system. In this case, the employee at the medium-sized business can retrieve the contract at a moment’s notice. It is about as easy as pulling up a digital Rolodex card.
This also creates a need, and therefore a reason, to incorporate procedures that are easy to follow and familiar to maintain. This helps the employees to feel as if they understand their job and gives them more confidence that they have done it correctly.
Benefit 3: Room for Future Growth
A systemized, automated contract management system has so many benefits when compared to one that is not automated or not set up at all. They are likely more easily recognized after the system is implemented and the medium-sized business realizes the efficiency, ease-of-use, and other benefits.
One such benefit is the ability to duplicate a contract and then create a unique approach to that contract. This is essential when dealing with larger clients who may want customized offerings.
What is the purpose of that action? It is helpful if you want to run a special deal, or prepare for a holiday season sale. It is particularly helpful if you decide to run such a sale at the last minute.
Solution: A System for the Management of Contracts
Instead of relying on your memory or worse yet, moving forward without a contract, you have the ability to grab the digital version of an existing contract (or its template) and duplicate it so that it can be modified for your sale or business transaction.
This allows opportunities to focus on the growth (especially that which comes with a special deal!) rather than getting tied up with the details of the management of multiple contracts.
There you have it — these are some benefits that you will receive if you choose to implement some sort of systemized contract management system in your medium-sized business. Of course, you can still use the system if you are a small business and, in that way, you would be ready for that growth as you prepare to emerge as a medium-sized business. Maybe, it will even free you up from some of the paperwork… enough to make that leap!