Blog Details

Contract management is crucial for start-ups and when it is implemented properly, it can help startups to grow and have a competitive advantage. Startups often neglect contract management or have poor contract management processes.  Contact management involves the responsibility of managing contracts from employees, vendors, business partners, customers.

A properly implemented contract management process can help startups to control their cost, generating the maximum value for startups contract agreements, minimising the risk. Contract management can help in effectively managing and reminding Contract obligations. Contract management requires good research, clarity of purpose, flexibility for both parties, willingness to adopt contract terms, and being able to adjust the terms when needed.

Startups main goal is revenue and growth of the business. Startups also have many active contracts and contracts speak about every aspect of startup strategy and relationship. If startups fail to implement proper contract management processes these can result in heavy fines, costly litigation, missed savings, revenue loss, and broken relationships.

Startups often neglect contract management until it becomes a serious problem. Businesses in their initial stage faced a lot of challenges. They have limited resources, rising demand and a limited budget. The manual contract management process is easy when there is a low number of contracts but once the business starts growing and the number of contracts is increasing startups start neglecting the contract management process. This process needs time and money which involve hiring people such as contract managers, lawyers, and purchasing technology. Another reason why startups neglect this process is that there are other important areas such as sales and HR which generally prioritise. Startups neglect this process because ignoring or postponing does not create penalties.

Proper implementation of the contract management process can help startups in various ways. It improves transparency and increases the spend visibility by having a record of all your contacts and it can help in identifying the cost-saving opportunities. It can also attract potential investors. When startups have properly managed contract documents with timely review of contract performance and while renewal of the contract startups can negotiate with better terms. Having a contract management system can enhance compliance and help in reducing the risk that can destroy the startup.  The contract management process is easier when the business is small because the number of contracts is less.

The effective contract management system is not a very focused area when it comes to growing organisations. When business is small startups can follow the manual process but as a business grows startups can use modern technology to manage their contracts. The contract is all about performance and contract management can enhance the performance of a startup.