- Always Be Ready for the Auditor
Working in an auditable way is a great discipline for any contract manager because audit-friendly procedures tend to be more robust and transparent. Instead of rushing round in a panic to put documentation and evidence in place before the audit, you can meet the auditor with confidence. It helps a lot if all the documentation is organised in one central system – this shows the auditor that you have systems in place to manage contracts effectively.
2. Make Sure the Supplier Contracts Are Reasonable
In part, this involves treating suppliers fairly – the power of large companies over smaller ones is becoming an increasing concern of governments. The Chartered Institute of Purchasing and Supply (CIPS) reported recently that the French government has taken Amazon to court, seeking a fine of EUR 10m for including clauses in contracts that allowed Amazon to modify, terminate or suspend the contract if it wanted to.
3. Automate the Management Process
Good contract management in an organisation that has hundreds or thousands of contracts running needs specialist software. General accounting software doesn’t usually have the specialised tools that you need. For example, you may need varying amounts of notice on different contracts so that you get an alert that a particular contract is coming up for renewal.
Similarly, you may need to have centralised access to other documents, such as Service Level Agreements, that will be accessed by users but can be key to managing problems if the supplier isn’t performing satisfactorily. Many major accounting systems such as SAP aren’t able to deal with the complexity of modern services – for example, software being provided as a service or complex cloud infrastructure and service contracts.
3. Gather All the Information in One Place
Contracts aren’t just legal documents. There is a whole lot of extra information that sits with them – contact names, appendices, service agreements, memoranda and so on. Contract management becomes a lot easier if all of these items are stored on one supplier management software system that everyone collaborates in using, such as those available from https://www.contractswise.com.
4. Use a Performance Dashboard
Finally, to get meaningful business intelligence from your supplier management system, you’ll almost certainly need a dashboard to give you at-a-glance performance indicators.