Every SME has dozens or even hundreds of contracts: Rent, mobile phone, cleaning, office supplies, software subscriptions, credit cards, ...
Contracts and, above all, their management are an essential part of a well-organized company, as contracts contain important information and obligations. They regulate deadlines, costs and responsibilities - and poor management of these documents can have significant disadvantages. Missed notice periods can lead to unnecessary expenses due to extended contracts, and incorrectly filed contracts make it difficult to access important information. As a result, employees spend a lot of time searching for documents, which delays the processing of urgent requests. Especially with sensitive contracts, there is also a risk that unauthorized access could lead to legal or financial problems due to poor administration.
Structured contract management, on the other hand, offers clear advantages: Contracts are securely stored, easily accessible and future expenses and income can be better planned through sound analysis. This also makes contract management an indispensable part of management risk controlling (MRC), which helps companies to work more efficiently and securely.
Contracts form the backbone of all a company's business activities - they regulate obligations, secure revenue and minimize risks. For this reason, responsibility for contracts cannot be limited to a single person or department. Instead, almost all areas of a company rely on contracts in some way, even if some departments work particularly intensively with them.
The legal department is responsible for drafting, reviewing and negotiating contracts and ensuring that they are legally sound. The sales department manages contracts with customers, while the purchasing department focuses on agreements with suppliers and business partners. The HR department focuses on employment contracts, while the IT department arranges software licenses and other IT-related agreements. The accounting department also uses contracts for invoices and annual financial statements, and the management and controlling departments analyze contract data in order to make well-founded strategic decisions.
This wide use of contracts shows how central they are to the company. A smooth contract management system helps to coordinate the various departmental requirements and ensure that all relevant information is available at all times.
There are four strategies to manage such contracts:
1. management by chaos
Put all current contracts in a pile and write the deadlines on slips of paper. From time to time, one looks for a definitive filing place for the documents. And at some point you realise that this seemingly efficient method of "minimal management" is a secret time-eater.
2. folder parade
Who doesn't know them: the shelves where grey folders stand in rows. All neatly labelled. This has been the preferred management system for decades. It only works as long as you have the time or money to file every contract and regularly go through the folders to check the due dates.
3. "You do it"
You look for a capable trustee and simply send him all the contracts and invoices. Out of sight, out of mind. At the latest when you quickly need some information about the contracts or the trustee asks questions, the disadvantages of this method become apparent. It is also expensive.
4. contract management software
The principle is simple: record all contracts in a database so that all information can be found clearly on one platform. This is, of course, the ideal way. However, you have to bear in mind that you have to enter all the contract data yourself first. That costs quite a lot of time.
But there is another way: A new generation of Contract management software can be found in the next section.
ContractHero is new. Ingeniously simple. It takes little time to enter contracts. And searching for contracts even less. So it's just right for busy companies who have better things to do than waste their valuable time on contract management. With ContractHero, you manage all your contracts centrally in one place. And without having to spend hours typing contract details into forms first. Simply upload your contracts. ContractHero analyses the contracts and extracts all the important information for you: subject matter of the contract, contracting parties, agreed costs, deadlines, etc. ContractHero provides this information in a clear dashboard.
ContractHero gives you a complete overview of your contracts. You can search your entire contract inventory by keyword, sort it into categories, sort it, tag it, ... You can also display a list of all due dates. Or list all contracts that expire in the next 2 weeks. Our users find the financial evaluation options particularly exciting: For example, you can sum up sales revenues and contractual obligations across all contracts and graphically display the future cash flow. Of course, ContractHero cannot replace bookkeeping. But it does provide a good overview quickly and easily and also a good feeling of having everything under control.
With ContractHero you will never miss a cancellation period again. You can set a term and a cancellation period for each contract and also set a reminder. This way, you will be reminded of your expiring contract at the desired time and will no longer miss a deadline. You can react in time and cancel, renegotiate or extend the contract.
With ContractHero, you can manage your contracts effortlessly. All you have to do is upload the contracts; ContractHero will take care of entering the essential contract information for you. The contract management software can also remind you of notice periods so that you always have all contracts under control.
You may also be interested in...
Contract automation: How modern technologies are revolutionizing the process
Recognizing and avoiding contractual risks: What to look out for?
Drawing up a contract: Challenges & solutions
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