Industry, Risk & Compliance

9 essential functions of an effective contract management system

In the funding landscape, you are only as good as your current contract. How and what you deliver against the contract impacts how well your organisation is positioned for the next funding round.  

Managing contracts is complex. It’s not just about knowing when a contract is due to end or up for renewal. It requires an end-to-end focus from negotiation and scoping, through to implementation and review, to ensure expectations of all parties are being met.  

In signing a contract, the organisation is agreeing to the terms and conditions which may require changes to internal processes and systems to ensure acquittal and other reporting is managed within the specified timeframes. Where funding is based on deliverables being met, processes need to be implemented to prompt invoicing and notifications, if stipulated in the contract. 

In order to meet the expectations of external parties, organisations need to have their own house in order. This requires having clear designated responsibility and accountability for delivering required services and programs, escalation procedures to respond to issues, and processes for endorsing acquittal reports to instil confidence. Relationship management is critical to assure the funder that you are able to meet the terms of the contract.   

Two illustrated men shaking hands after a contract has been signed.

An effective contract management system is therefore essential for reducing risk and ensuring compliance at all stages of business relationships. Here are nine essential functions of a good contract management system.  

  1. Track and support the negotiation phase with capacity to manage the planning and implementation phase. 
  2. Delegate responsibility for acquittal and other reporting requirements. 
  3. Track performance against stipulated timeframes and milestones.  
  4. Manage escalation of issues to enable corrective action before required deliverables are impacted.  
  5. Store all associated records including copies of emails and other correspondence, and documentation such as legal advice, pertaining to the management of the contract. 
  6. Prompt invoicing, where payment is made when outcomes are achieved. 
  7. Manage the review and expiry dates with sufficient time to ensure the contract is renegotiated in time not to disrupt the service being provided between contracts. 
  8. Provide top management with clear insight into the organisation’s performance against compliance requirements. 
  9. Support due diligence in the review phase by coordinating input from legal, HR, financial, workplace health & safety and program advisers. 

Once you have the basics right, you can take your contract management system to the next level by investing in software that streamlines the process for you. Platforms like LogiqcQMS give you confidence that every contract including insurance policies, warranty agreements, employment contracts, funding contracts, Memorandum of Understanding (MoU), service-level agreements (SLA) and partnership agreements are: 

  • All centrally located 
  • All appropriately restricted to authorised users 
  • All associated compliances have been delegated, ensuring responsibility and accountability 
  • Performance monitoring against the contract is in real-time 
  • Historical records are maintained 
  • Traceability of performance is maintained over time 

When management are confident that they can grow the organisation, knowing their systems can manage scale and complexity without compromising safety, quality and risk, you can be sure that your contract management system is ticking all of the right boxes. 

Want to know more about LogiqcQMS’ contract management capability? Let’s start a conversation.