Most companies have distributed contracts with no one single person owning the contracts. Because of this companies loose a lot of money in non-compliance to the contracts. For eg . if the person who is buying is not the owner of the contract , contract leakage may lead to un-necessary losses.
In this day and age companies need to implement stronger control over their contract management to ensure careless dollars are not lost. Here is a step by step procedure on how this can be achieved.
1. Get all the contracts currently available in the company and classify them in broad contracts. There could be a possibility that most of the buy is happening wihtout any contracts Ensure that there exists a contract for any procurement of sale related transaction.
2. Ask the legal department has vet all the documents currently in the company
2. Legal can circulate a template of contract with accepted clauses around the company . Procedure should be set in such a way that if the contract clauses are changed , the deviations should come to legal department for vetting. This will ensure faster contract execution time.
3. Contracts should be managed such that the current person is notified when the contract is about to expire.
4. All the contracts should be available in one single repository and should be searchable with dynamic indexes.
Wednesday, October 22, 2008
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