Contract managers are essential in the management and supervision of contract operations in the organization. They handle the entire lifecycle of a contract, from preparing and negotiating a contract to tracking, compliance, and the renewal of the same contract. Proper contract management will help an organization cut risk, realize the total value of a contract, and foster good client relationships.
The subject matter experts offer support during the negotiation of contracts, where they translate the business needs into suitable contractual language. After implementation, they manage the relationships with the vendors and day-to-day contract administration.
It entails observing the set clauses of the contract to achieve the agreed objectives and outcomes. Therefore, this article will examine the primary duties and needed competencies of an efficient contract manager.
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What are the critical responsibilities of contract managers?
The primary responsibilities of contract managers revolve around overseeing financial elements, executing contracts, and supporting strategic objectives. Further aspects of their role are discussed below.
Maintaining organized records
A good contract manager understands that any signed contract is as active or alive as if it never existed. Efficiency, compliance, and risk minimization within an organization also require keeping proper records of all the documents a company maintains, even post-contract.
Thus, a contract manager employs stringent file structures and document management policies for the preservation of vital contract information produced during the course of the contract period. Contract tracking software with search is an example of a digital tool that makes the records readily available to stakeholders. They assist when other departments require information and serve as evidence for audits.
Risk assessment and mitigation
One of the critical roles of any contract manager is to continuously scan for risks associated with the contracts they are managing. They do their best to put in place clauses that ensure the organization is protected from unpleasant issues during contract negotiations. It can be illustrated in various ways, such as protecting intellectual properties, ensuring contractual obligations, and terminating clauses upon condition breaches.
They monitor for conditions during the contract lifecycle that might change risk levels, such as new regulations, market shifts, or technological innovation. The manager suggests preventive measures, such as amendments to plug loopholes or additional insurance. Separately, mitigation plans can be drafted by managers for high-risk contracts that specify steps for reducing risks. Due to the uncertainties, this proactive approach to risk reduction helps organizations feel secure.
Contract managers make sure that there is compliance with all necessary laws, regulations, and policies surrounding the contracts. They update themselves with new rules regarding terms and conditions so they can be at the same pace as their customers.
The purpose of audits is to ensure financial accuracy and that there are adequate safeguards. The manager tracks noncompliance and acts on prescribed contractual remedies whenever necessary. In addition, contract tracking software has extra features that can make it perform excellently in management.
Vendor relationship management
In general, contract managers are the principal interface between any organization and suppliers. They foster communication and ensure a continuous flow that helps prevent misinterpretations that culminate in disputes. The issues are taken through a collective process, which leads to quick escalation and quick resolution.
The manager nurtures positive, productive relationships that enable the flexibility necessary for responding to unexpected occurrences. The relationship focus makes both parties feel valued and creates goodwill in the negotiation. Trust shared among organizations creates profitable contracts and renewals.
Contract Manager Top Skills
The skills of contract managers enable them to perform effectively in this complicated job. Below are some critical skills for successful contract managers:
Contract managers need to develop good negotiation skills to get favorable terms for agreements with vendors. They strive for win-win deals in which all parties derive benefits. They always make the negotiation process smooth and positive because of their expertise.
High contract volumes with multiple moving parts require extensive organizational capabilities. Contract managers implement detailed tracking systems through the structure. In addition, they succeed in juggling priorities and meeting many deadlines while dealing with hundreds of agreements at once.
Contract managers have sharp critical thinking skills, which enable them to spot risks, variability, and opportunities in complex contracts. These problems identify language, specification, terms, and vendor issues. They solve future problems through their ability to judge in advance.
Contract management is also about applying financial analysis skills to pricing models, invoicing, budgets, payments, and other monetary elements. Such transactions check accuracy and safeguard against any transactions improperly made or misused contract funds. Financial competence is vital.
Organizations that depend on contracts will only survive with a great contract manager. These professionals maximize the whole contract life cycle by harnessing diverse skills. They ensure value addition to their strategic importance through prudent supervision and control, driving innovation and operational excellence.
Qurat-ul-Ain Ghazali, aka Annie, is the growth manager at Contractbook and looks after all the organic channels. She has been with tech startups and scaleups for a couple of years with a B2B focus. You can find her socializing, traveling, indulging in extreme sports, and enjoying the local desserts when she is not working.