What is Contract Administration?
Contract administration includes planning, creation and implementation of a contract by ensuring that it completes all of its specified objectives. It refers to the precise actions performed to accomplish the intended business results and manage the contract lifecycle.
Contract administrators must keep open lines of communication in order to design, carry out, and expedite the contracting process as effectively as feasible. Establishing the requirements of a contract calls for a careful oversight. Therefore, cooperation between internal departments (such as legal, finance, procurement, sales, SCM, IT, etc.) and external counterparties is necessary at all times.
Contract administrators are often in charge of any task involving contract oversight. This comprises:
- Before an agreement is finalised: Requesting, drafting, negotiating, receiving approvals, and signing.
- Once a contract is executed: tracking of storage, renewal, and expiration
Key Stages Of Contract Administration
Regardless of the contract type, contract administrators need a clear yet flexible contract administration plan that promotes and makes collaboration simple in order to maximise performance. As a result, time-saving, contract compliance-promoting, and friction-eliminating standard procedures will immediately enhance the contract administration.
Stage 1: Contract Planning
Planning is the first step in contract administration when the contract is not documented yet. Additionally, planning is crucial in this situation and involves the hierarchy listed below.
- Defining the objective, scope and deliverables
- Setting up a timeline
- Laying out financial terms
- Planning the work
- Factoring in the risk involved
- Contract drafting
- Legal review
Stage 2: Contract Negotiation
The drafted contract document is further submitted to the other party for the contract negotiation process. Your contact administrators will need to, if necessary, defend your position because they may recommend a few changes to ensure that your interests are considered. Redlining is a process that requires much negotiation.
Stage 3: Contract Execution
You and the other party have agreed on the conditions of the drafted contract. Having finalised the drafted document, the contract must be signed before it takes effect. Signing on the dotted line and notifying all parties that the contract is now in effect are the necessary steps in contract execution.
Stage 4: Contract Management
The main goal of contract management is to ensure that the agreement remains effective at all point of time. At this point, a contract manager enters the picture and functions under the administrator’s direction.
This work contains:
- Keeping track of the parties’ progress toward the project’s milestones
- Resolving problems that emerge along the way
- Taking advantage of unanticipated occasions
- Revisions and modifications to the contract
- Handling contract renewals
- Updating senior management on the development.
Stage 5: Contract Closing:
Each contract contains a set of objectives. And once those objectives are achieved, the relationship’s advantages will have been fully realised, and you might be tempted to terminate it right then, which can be a mistake. Your contract outlines the commitments you and the other parties have agreed to uphold in addition to its objectives.
Stage 6. Post-Contract Review
Though the contract has been closed, that doesn’t mean that the contractual performance is accomplished. Calculating the cost and benefit of the relationship is still necessary.
Contract administration starts with a concept, develops into a document, and concludes with demonstrable outcomes and introspection. Contract management is one of the stages in this procedure.
The contract administrator is the person who makes sure that this process is successfully completed from beginning to end. They collaborate closely with each contracting party to achieve this.
What Does a Contract Administrator Do?
A contract administrator is held responsible for handling contracts between two or more parties. Usually, they are employees of companies, institutions, organisations, or government agencies to supervise the negotiation, implementation, and contract performance.
Below listed are the duties of a contract administrator –
- Drafting and vetting legal notice or document to make sure that they are legally enforceable and in compliance with the company’s policies and regulations.
- Negotiating terms and conditions of contracts with vendors, suppliers, and contractors.
- Monitoring contract performance to ensure that all parties are fulfilling their obligations.
- Resolving any disputes or issues that arise during the life of the contract.
- Analysing contract data and preparing reports on contract performance and compliance.
- Keeping records of contracts and ensuring that all required documentation are maintained.
- Providing guidance and training to colleagues and stakeholders on contract-related matters.
- Keeping up with all the parties involved in a contract.
To summarise, a contract administrator makes sure that contracts are managed effectively and also that all the parties are fulfilling their contractual obligations.
Contract Management Tool for Contract Administration
A contract management tool is a software application designed to help businesses and organisations to manage their contracts more efficiently. The tool can be used to track and monitor contractual performance, manage contract terms and conditions, automate contract renewal processes, and more.
The key features of a contract management tool typically include contract creation and authoring, contract repository and storage, contract tracking and monitoring, contract approval and signing, and contract reporting and its analytics. It is also possible for advanced contract management tools to offer artificial intelligence and machine learning capabilities to help automate contract management processes.
Contract management tools are particularly useful for contract administrators who are responsible for managing large volumes of contracts across multiple departments or business units. With the use of contract management tools, administrators can enhance contract compliance, reduce the risk, and elevate efficiency in their contract management processes.
Some popular contract management tools on the market today include Agiloft, Ariba Contract Management, ContractWorks, and DocuSign CLM (Contract Lifecycle Management). While opting for the right contract management tool, it is crucial to take into account various factors like ease of use, scalability, integration with other systems, and the overall cost.
How Can Contract Bazar Help You with Contract Administration?
Contract Bazar is a law firm that specialises in providing contract management and administration services to corporate clients. Here are some ways Contract Bazar can help you with contract administration:
- Contract review and analysis: Contract Bazar can review and analyse your existing contracts to identify potential risks, areas of improvement, and opportunities for your cost savings.
- Contract creation and negotiation: Contract Bazar can assist you with creating and negotiating new contracts to ensure that your business interests are protected and that the contract terms and conditions are favourable.
- Contract tracking and management: Contract Bazar can help you track and manage your contracts throughout their lifecycle. This includes monitoring contract performance, tracking contract deadlines and renewals, and managing contract amendments and modifications.
- Contract dispute resolution: Contract Bazar can assist you with resolving contract disputes through negotiation, mediation, or litigation, depending on the circumstances.
- Contract training and education: Contract Bazar can provide training and education to your employees on the best practices in contract management and its legal compliance to ensure that all your contracts are properly managed and administered.
Overall, Contract Bazar can provide you with expert guidance and support throughout the entire contract management and administration process. With Contract Bazar, you can ensure that your contracts are properly managed, your business interests are protected, and your legal compliance is maintained.