In business, when two or more parties enter into an agreement regarding some work, they prepare an official document that contains all the details of the service and work they would be providing, the scope of work, the nature of work, time deadlines, quality standards, actions on what can be done if they fail to accomplish what they promised and the total price for the services or products received/supplied. This official document is called a Contract.
The idea of making a contract is to keep evidence or a hard proof that the services and products agreed upon are catered. If the vendor/party fails to accomplish what the contract underlines, legal action can also be taken against the party.
Contracts are of many types. Sales contracts determine that a party is selling a particular product or service to the buyer; a purchase contract is a contract that is made to determine that a particular product or service is being purchased by a party. Then there is an IP contract that is short for Intellectual Property Contract which is a contract done between institutions and underlines the rights, duties and responsibilities relating to the intellectual property that is a result of their collaboration. A real estate contract is a contract done between the real estate seller and buyer; the employment contract is a contract that a company gives when it hires an employee. The employee contract has all the rules, regulations, salary and incentives listed under it. A Government Contract is one which is made by the government for commercial purposes underlining things like procurements, selling, deals, hiring of services, etc. Some more contracts that are not as common as the ones listed above include Trade agreements, partnership agreements, insurance agreement, reimbursement, legal contracts and management contracts.
It is possible that a big organization or even a small or medium sized organization has a number of ongoing contracts and agreements and to manage all of them securely becomes a problem and their management is quintessential as a lot of money is involved in it. So, for effective management and security of contracts, you need an effective contract management tool/software. Nowadays, thanks to technological advancement, computer programmes and softwares can do the job effectively and without consuming much time in a much cost efficient way. CAFM or Computer Aided Facility Management Software also have tools for Contract Management. But thorough training and skills are needed for operating the CAFM software because a single error can lead to a tedious task of rearranging all orders and contracts again.
So now the question arises that what are the benefits of contract management, why would someone manage contracts, what good would it do them? The answer is simple: it gives them better organizing of contracts, not a single one will be misplaced or lost. Other benefits of contract management include reduction in the administrative costs, better accountability and enhanced forecasting and business predictions. Also, when your contracts are managed well, your customers and clients are happy as well because this way you ensure that you know the rules and conditions of the contract and that you’ll abide by them.
These days, when everything is getting automated and computerized, managing contracts in a tech-friendly way is your best bet. Using a good and reliable CAFM or Contract management software can be of great help to you, your company, clients, vendors and customers.
