What are the Seven Phases of Contract Management? 

When managing contracts for any level of business, some fundamentals define the quality of the process. These fundamentals include request, creation, review, approval, analytics, and termination or renewal. Each one is explained below.

1. Contract Request

Contact request is where the contract process begins. It involves identifying relevant details and documents to the contract. Depending on the Team where the contract originates, the specifics of each contract are likely going to be peculiar. Usually, management software will accelerate the process. For example, creation of a contract proposal by a sales team member.

2. Contract Creation

Contract creation involves the process of authoring contract details, usually from a template. The process sees a combination of different clauses and business objectives. In the past, this was achieved through Word documents; a method that features several errors and risks.

Meanwhile, when contract processing software is used, less experienced personnel can create contracts just by inputting certain details. Also, each Team can self-service within the business rules and goals.

3. Contract Review

The contract review process involves collaboration with team members and third parties to confirm details and finalize negotiations. The management system must incorporate adequate features for comparing, tracking, and changing document versions for this process without creating confusion.

4. Contract Execution

After the review, a contract is approved and execution begins. The contract approval process could require passing the contract through certain parallel or serial flows to ensure all-around agreement and compliance. After that, the contract is put into motion with the necessary signatures. Contract lifecycle tools have an e-signature function for making the process seamless.

5. Contract Performance Tracking

Contracts can last for different timelines with milestones in-between. While the contract process is ongoing, it is essential to analyze performance from time to time. This is just as important as previous steps in the system since it ensures compliance and tracks progress. Contract tracking is also important for terminated contracts for more encompassing performance analysis.

6. Contract Amendment

This involves changes to the initial contract agreements. This happens when there is a new development that did not exist when original negotiations were in progress. However, an amendment is tricky and needs to be addressed carefully to avoid compromises. Contract managing systems are equipped to deal with such developments because they keep document backups and track changes. 

7. Contract Termination or Renewal

At the end of a contract process, involved parties must agree to terminate or renew the contract. Terminated contracts are archived in the database while renewals begin the cycle all over again. Keeping track of all these details is crucial to contract processes. The contract lifecycle management software has features for tracking these details and notifying relevant teams or individuals.