Contractia Contract Care®

Contractia Ltd.
Simonkatu 12 A 7
FI-00100 Helsinki
Finland
Tel. +358 50 540 5109
Fax +358 9 623 1054
info[at]contractia.fi

Benefits of contract management

Company interest viewpoint and contract management

How do you transfer contract responsibility to a new person when the previous contact person is leaving the company?
Have organisational changes, dismissal or retirement of employees affected contract management or caused losses in income?

Good agreements cannot be drafted or negotiated without professional and skilled management and contract negotiators. However, one must keep in mind, that these professionals act on the behalf of the company and in the interest of the contracting party they work for. Therefore the most important issue to keep in mind with contract management is always the best interest of the company!

Organisation changes occur more or less once a year, if not more often. Due to organisation change the responsible persons of valid agreements tend to change as well. Contract management must follow the organisation change and new contract responsibilities. Contract parties have to be informed without delay of the new contract responsible person. Management and the rest of the own organisation have to know who is in charge of agreements in the future. It is important to know internally who has the authorisation to approve costs related to particular agreements.

Organisations should manage agreements in a centralised way and in neutral manner to keep the focus on the interest of the company. It should not be allowed to "hide" agreements in employees’ own files, "forget" them on desks or allow management or employees to "hold back" information related to agreements. To avoid this companies need a new tool, electronic contract management system.

Risk management and visibility of corporate functions

Have you evaluated what kind of outside threats are related to contract documents?
Is the document archive completely protected of outside threats?

Even if agreements would be negotiated as well as possible, contract risks might always be included. Risks related to contracts should be controlled and limited. Important factor associated to agreement documents are risks to the paper documents. In case a company has only paper archive for its valuable agreements; fire, water damage or thefts may cause a serious and irreversible damage to the documents. With the help of contract management software, paper documents are scanned into picture format (PDF etc.) and documents are filed on a server. Server is located to a different location than where the paper contract archive is located. With these precaution steps company can assure, that if outside threat would jeopardise physical contract archive, electronic contract database and the scanned contracts could be restored immediately. This way business functions of the company will not be harmed.

Could superiors, management or internal control audit signed agreements with centralised tool?
Who are contract parties and what kind of clauses exist in valid agreements?

With centralised contract management reporting is easier to management, owners of the company, auditors or government authorities. Corporate functions become more visible. This factor alone can prohibit corruption and help to control and follow-up financial obligations throughout the organisation.

Cost efficiency and effective procurement

Do you know what agreements are expiring this month, during the next quarter, this year? Who has the responsibility to re-negotiate or terminate agreements?

Companies can reach significant cost reductions by following up actively expiry dates on their agreements with contract management system. Contract management system alarms in advance of agreements, which are about to expire. Company can follow up with reports, which agreements are about to expire during the next quarter and make plans regarding the termination or re-negotiation of the contracts.

Do you know how many procurement agreements your company has and who are the contract parties? Does your organisation do a lot of business financially with a supplier without a valid written agreement? Can you check the invoiced amounts easily and promptly from the agreement documentation?

With effective contract management system company could find several unnecessary and catch and terminate "evergreen" agreements. The investment in contract management system will return the investment to the company in no time.

Benefits for customer service and administration

Do the customer service personnel have easy access to contract information? How lawyers or other employees who take care of the contract disputes have access to valid and up-to-date contract information?

Remember the "Arm length rule". Information which is not within reach is not usually checked or if the information is located in a place, where it is not possible to attain without loosing precious working time. It would be useful to check contract during the customer’s phone call. Also during internal meetings contract information and contract clauses are often on the table for discussion. These facts can be easily checked from contract management system with our own PC.

Do the personnel in your company know where to send the signed agreements for archiving? Do the other business units know, which contractual partners the other business units have agreements with?

Centralised and effective contract management system and archiving tool motivates employees to bring signed contracts for archiving. Later they can view the contract information with their own PC with personal access profile. This way they do not have to mind the other organisation with their contract information requests.

Financial management is pleased when the budgeting rounds speed up. When company is planning strategy for next year, contract reporting and contract duration have significant importance. Company can avoid purchase overlapping and leave out unnecessary suppliers. In case current partner agreements are about to expire, company can opt for different strategic partners.

Contractia will help you to find a suitable solution for effective contract management. Please click to Services.