Contract administration is the development, execution and oversight of contracts. If you’re a business owner or legal team that manages contract administration, a solid foundation and plan can help your team minimize legal risk, eliminate redundancies and reduce spending on unnecessary legal implications. A contract administration plan helps protect your assets.
Contract administration plans help teams take control of and predict the success of contracts by anticipating needs and addressing potential problems before they arise.
The Basics of a Contract Administration Plan
Common challenges companies face when managing contracts stem from a lack of planning or a lack of resources — the wrong tools or software, inattention to contracts that aren’t problematic, long contract life cycles, or the absence of a designated contract administrator. A guide or framework for contract administration can help eliminate some of those challenges.
The success of contracts and contract administration plans relies on three components:
- Communication. All involved stakeholders and the author of the contract thoroughly understand each party’s roles and responsibilities. Before contract execution, the contract administrator establishes and shares guidelines for communication expectations.
- Cooperation. Each party must understand how to comply with the contract, what documents are required before commencement of the contract and that reasonable deadlines and expectations will be met.
- Coordination. Determine the workflow for contract and how each party will engage through the contract. This relies heavily on communication and cooperation.
Before Awarding a Contract
Establish guidelines for communication. Set kickoff meetings, especially for contracts with higher financial risks. Ensure buy-in from all partners and create protocols for communication. Provide clear structure and guidelines on expectations before, during and upon closing the contract.
Provide clarity and details in the contract. Each deliverable should have a checklist and set standards of what is acceptable, as well as allowances for substitutions. Schedules should include specific milestones and require progress reports and take into consideration factors that may affect the schedule. Consider risks that could prevent your company from fulfilling contractual obligations and include strategies to address potential risks.
Contract Monitoring and Oversight
Document and communicate. A contract file should contain all relevant communication and performance indicators. Follow up with progress reports, holding each party accountable for upholding the agreement. Ironclad’s dynamic, secure repository can make a contract accessible and easy to find.
Plan for changes. Amendments to a contract are unavoidable. Establish a change management process that involves necessary business components to address any contract modifications.
Document compliance and performance issues. Identify problems early through ample and documented communication, and determine from the contract administration plan how best to address claims and disputes.
Create a contract closeout checklist that can be included in supporting documents to ensure all aspects of the contract have been satisfied.
Take control of your company’s contracts with a contract administration plan — and the right tools. Ironclad offers user-friendly, streamlined contract administration services for every part of the contract process.
Ironclad is the #1 contract lifecycle management platform for innovative companies. L’Oréal, Staples, Mastercard, and other leading innovators use Ironclad to collaborate and negotiate on contracts, accelerate contracting while maintaining compliance, and turn contracts into critical carriers of operational business intelligence. It’s the only platform flexible enough to handle every type of contract workflow, whether a sales agreement, an HR agreement or a complex NDA. The company was named one of the 20 Rising Stars on the Forbes 2019 Cloud 100 list, and is backed by leading investors like Accel, Y Combinator, Sequoia, and BOND. For more information, visit www.ironcladapp.com or follow us on LinkedIn and Twitter.
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