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As businesses expand and grow, the number of contracts they must manage often grows exponentially. These can range from employee agreements to supplier contracts, client contracts, and partnership agreements.
Creating, executing, and monitoring these contracts can become a daunting task. But with a well-designed system, managing these contracts doesn’t have to be overwhelming.
In this guide, we’ll delve into the world of contract management and explore how Zegal can streamline this process for your business.
Understanding contract lifecycle management
At its core, contract lifecycle management (CLM) involves the process of managing contract creation, execution, and analysis. The goal is to maximise your organisation’s operational and financial performance while minimising risk.
Contracts are legal agreements that bind parties to certain obligations. Therefore, failure to properly manage contracts can lead to lost opportunities, revenue leakage, and increased risk and liability.
Contract lifecycle: Key phases
Understanding the lifecycle of a contract is the first step in effective contract management.
Here are the key phases:
Contract Request: Identifying the need for a contract.
Contract Creation: Drafting the contract. It’s essential to use precise language to avoid misunderstandings.
Negotiation and Approval: Terms are discussed and negotiated until all parties reach an agreement. The contract is then reviewed and approved by the relevant parties.
Execution: All involved parties sign the contract to signal agreement.
Obligation Management: Parties fulfil their contractual obligations.
Amendment and Renegotiation: Contracts must be amended or renegotiated as business needs change.
Audit and Reporting: Regular audits and reporting ensure compliance and help assess contract performance.
Renewal or Termination: A contract may be renewed or terminated at the end of its lifecycle based on performance and future business needs.
Best practices for contract management
Here are some best practices to ensure effective contract management:
Standardise Your Contracts: Consistency is crucial in contract management. Standardisation ensures consistency in language and structure, reducing ambiguity and mitigating risks.
Digitise Your Contracts: Digital contracts are easier to manage, store, and retrieve. They also reduce the risk of loss or damage that can occur with physical documents.
Centralise Your Contract Repository: A centralised contract repository allows for easy access and retrieval, reducing the time spent locating documents.
Implement Regular Reviews: Regular reviews help you stay on top of contract renewals, ensure compliance, and allow for renegotiations where necessary.
Maintain Clear Records: Keeping clear records of all communication and changes relating to a contract can be invaluable in preventing or resolving disputes.
How Zegal streamlines contract management
Zegal harnesses the power of legal technology to simplify contract management.
Effortless Contract Creation: With over 2,000 legally vetted document templates, Zegal makes contract creation a breeze.
Centralised Repository: Zegal’s platform is a central location for all your contracts, making them easy to locate and access when needed.
Digitisation: Zegal digitises your contract management process, improving efficiency and reducing the risk of lost or damaged documents.
Contract Automation: Automate routine contract processes with Zegal contract automation, saving you time and resources and minimising human error.
An essential tool for business
Contract management is an essential function for any growing business. With the right practices and tools, it can be a well-organised and hassle-free process.
By harnessing the power of legal tech platforms like Zegal, you can streamline your contract management process, reduce risk, and let you focus on what truly matters – driving the growth of your business.
Experience seamless contract management with Zegal today.
