Contract management is the management of contracts that a company has with suppliers and customers, but it also includes employee contracts or any other contract that may be necessary to follow up.
Contract management is sometimes also known as contract management.
Contract management is the entire process, from creating the contract and negotiating the terms of the contract to documenting all changes made since the original contract. This is the reason why most contract management software also has very good functionality for document management as it tracks the different revisions in contracts.
So what is a contract really?
A contract is a legal link between two or more parties, identified in the contract, to comply with what is agreed in the contract. A contract generally includes many terms and conditions to ensure that everyone understands the entire commitment. It is very common for a contract to include what will happen if a contract is not fulfilled in accordance with the agreements.
One thing to understand, which is not uncommon, is that companies sign agreements and then sometimes decide to bankrupt the company if they cannot fulfill the contract. Since the contract is signed between two companies, there is not much to do in these cases. This is more likely to happen with smaller companies or larger organizations that need to be rebuilt, as is common during financial crises.
Contracts are stored in contract management software and a common term for the entire contract life cycle is Contract Lifecycle Management (CLM). Contract lifecycle management is contract management from start to finish, including contract renewals.
One benefit of contract management software is keeping track of when contracts are about to run out and therefore need to be renegotiated. This is especially necessary when the terms and conditions include the automatic extension of the contract. http://www.lexalbex.com/
In my early years as a manager, I ran into this problem when buying software. We divide the cost of the software into 3 years and the contract states that if we do not cancel the contract 6 months before the end of the 3 years, the contract will be automatically extended, under current terms and conditions, for another 3 years. We installed the software, but after a while we decided to use another solution. Since we did not use the software, no one thought of the cancellation notice 6 months in advance. After 3 years we received another invoice that we had to pay. We tried to renegotiate the contract, but we did not, as the terms and conditions were clear and the software provider was not in a flexible mood.
Contract management is the management of contracts that a company has with suppliers and customers, but it also includes employee contracts or any other contract that may be necessary to follow up.