Keeping track of active contracts helps business owners ensure compliance, while optimizing customer relationships. If you’re a solopreneur, you may find contract management overwhelming. As your business grows, the task can become extensive.
No matter what phase of growth your company is in, knowing how to manage contracts helps you stay organized and prepared for future growth. Recruiting agencies must keep contracts for job candidates and the companies they send interviewees to, making the task even more difficult.
Successful companies retain their current customers, while finding new ones. The key to growth is to serve as many of your clients’ needs as possible and add new customers frequently. If you miss one or the other, you can fail to thrive. You also must keep the buyers you have at the same time and turn them into raving fans ready to sing your praises to their contacts.
Contract management involves reviewing, keeping current and storing paperwork. It’s recommended to set up a schedule where you review contracts frequently.
Here are the ways to take care of your contracts.
1. Create a Central System
In a typical business, you might have both digital contracts and physical ones. No matter the format of a client agreement, create a system for storing them that is easily accessible and you can train new people to access. Your human resources department might also need to access HR documents, such as contractor agreements, so keep in mind how you’ll separate client and employee records.
You can tap into the power of a third party contract storage system to keep everything organized and everyone on the same page. For example, if you have a human resources department and the management changes, will you be able to maintain the same methods? With a third-party system, the guesswork is taken out of how things are organized for future reference.
Contract Management Solutions Market Scope and Overview Report for 2023 estimated the market size was around $2.6 billion in 2022 and expanding to $6.8 billion by 2028. There’s a need for contract storage and management solutions. If you want to tap into third-party providers, the market is growing. It’s just a matter of finding one that offers what you need and fits your budget.
2. Track Milestones
A contract includes responsibilities for both parties involved. On your end, you’ll need to know when the contract is due for renewal and what your obligations are. The type of business you run will determine what key metrics you should meet.
Ideally, you’ll strive to outperform your agreement so customers walk away feeling they’ve received what they paid for and more. When you first sign a new contract with a client, make a list of the key indicators which show you’ve met your obligations. Take note of any due dates, such as having X,Y and Z completed by the three-month mark.
If you’re serving as a recruiter for a third-party, you’ll need to meet obligations to the business but they’ll also have some things they must agree to, such as giving your candidates priority.
You should also pay attention to metrics and performance. When you offer your clients an excellent return on investment, they’re more likely to renew contracts. They might also tell others about you and help your company grow via word-of-mouth marketing.
3. Monitor Contract Performance
Keep a list of milestones and set reminders for when they are due. For example, if you promised to have a website completed by a certain date, it should be finished before that time in case you need any adjustments.
Did you make promises that aren’t in the contract but you spoke or emailed to the client? If so, add those to your contract performance reminders. Just because the client forgot to have you include it in the contract doesn’t mean you shouldn’t still see out your commitment, especially if you want to retain clients and grow.
One of the best ways to measure metrics is to put everything in a spreadsheet and run analytics to see where you are with completing tasks. You can use project management software or digital contract management software to accomplish this.
Research shows workers spend around 60% of their time in tasks related to work rather than focusing on building clients and expanding opportunities. The day-to-day drudgery of completing paperwork can lead to burnout. Tapping into software is one simple solution to ease up the pile of tasks on most employees’ desks.
4. Communicate With Stakeholders
Although you might think of a paper or digital document when considering contract management, there is much more to overseeing agreements and keeping clients happy. There are numerous stakeholders for any contract, including vendors, clients and internal teams.
All these elements must be kept informed. Improving your communication skills helps you take care of active contracts and ensure you meet your standards for yourself and your staff.
Spend time setting up some automated reminders of key milestones. For example, if you’re a recruitment agency and you’ve signed an agreement with a company to provide candidates within a time frame, you should send reminders to potential employees to get their resume in, to write a cover letter and to prepare for the interview. You should also communicate with the business to let them know when they can expect their first interviewees.
Set up a system to work with remote employees. The world seems to be more inclined to offer remote options for positions. Many of the people you recruit may be out of the area. How will you keep the lines of communication open, even if someone is in another state or country?
With the average commute time around 28 minutes each way, expect candidates to want only remote jobs. Communicate to your employer clients that they’ll open themselves up to more qualified workers if they offer at least a hybrid-remote approach.
5. Review Terms
Small agencies have limited time and resources. If you have a contract with a particularly needy or troublesome client, they may waste most of your working hours and leave little time to seek new clients.
Anytime a contract nears renewal, you should review the terms of the contract. Is the listed rate enough to cover the workload? Perhaps you need to raise your prices.
It is also okay to fire clients by telling them you won’t be renewing the contract. In the early days of building a B2B organization, letting a guaranteed customer go is scary. However, you’ll soon find you can fill the gap with several new clients who are a dream to work with. Never keep a customer just to keep them. If the relationship isn’t working for one or both of you, let it go.
6. Update and Maintain Contracts
Throughout the life of the contract, you should add any needed amendments. Since the average age of tenure in the United States is 4.1 years, companies may start using a recruiter’s services and realize they need more help than they initially believed. For example, a client contacts you and wants to add something significant to your agreement. Perhaps the initial contract agreed to help them fill five open positions a year but they’ve experienced growth and now have 12 open positions. Such a drastic change requires an amendment to the original contract.
Manage contracts by setting milestones. You may need to change them if something gets completed sooner or later than expected. Keep notes of any discussions about changes and always have the client sign off. Doing so prevents misunderstandings and situations where a client tries to return later and say you didn’t fulfill your obligation.
7. Send Renewal Reminders Early
People are busy. Don’t wait until the contract is due for renewal to send a reminder. Instead, set up an automated reminder at 30 days out or so. Set up a weekly reminder until they renew. You may want to reach out by phone two weeks out from renewal to make sure they plan to renew or see if they have any questions.
You’ll find some people automatically renew when they receive the initial notification, but others wait until the last possible minute. The speed of response isn’t an indication of how happy they are with your services. People may be in the middle of a big project or have a full inbox. Remind in multiple ways.
Contract Management Can Be Easier
Set up a few policies surrounding contracts to make contract management easier. How long will you keep old contracts? What information is crucial to have for future reference?
With a little attention to detail and by utilizing automated tools, keeping up with various agreements and your responsibilities becomes much more streamlined.
Why I Wrote This
Ongig strives to help HR departments and recruiting agencies work more efficiently. Our software helps ensure your job descriptions are on point and removes the guesswork of what job candidates respond to. Request a demo for Text Analyzer.
- Contract Management Solutions Market by 2030: Future Scope and Predictions (Market Watch)
- Electronic Document Management Systems (by Box Communications)
- 5 Ways to Find Remote Graphic Design Jobs (by Eleanor Hecks)
- U.S. Median Years of Tenure Report (by Statista Staff)
This is a guest post from Eleanor Hecks. Eleanor is the managing editor of Designerly. She’s also a mobile app designer with a focus on user interface. She lives in Philadelphia with her husband and Goldendoodles, Bear, and Lucy. Connect with her about marketing, design, and/or tea on LinkedIn.