Customer contract management is not a CRM task; it is a C-level responsibility, because the consequences of non-compliance in contracting are far-reaching and severe. Those supervising large capital contracts face personal risk, as well as risk to the organisation for death and personal injury, and poorly managing contracts directly affects the likelihood of litigation occurring and impacts on reduced revenues and profit margins.

Contract lifecycle management software on the sell side helps us get a better handle on what our organisation has committed to in customer agreements by providing visibility and access to agreements and pre-emptive alerts as trigger points approach. This mitigates our risk of non-compliance.

Quite probably you are not the person who negotiates and drafts the contracts in your organisation, but you manage customer accounts. If this is the case, then there may be important clauses in customer agreements that you need to know about, but don’t. One such clause is a possible right to raise the value of a contract by CPI every 12 months. There will be a limited opportunity before a contract rolls over into a new period where you are required to give notice that you are increasing the value of the contract, and if you miss the cut-off date, then you miss the revenue. There are many other possible reasons for cost increases that you may need to pass on, and these all have notification deadlines.

Compliance to customer contracts is business critical. Are you delivering what you have promised? (Remember a promise is a contract and vice-versa). If you don’t have a system that monitors deliverables and milestones, then you may not be in compliance with your commitments, and how would you know? You would not know until your customer tells you so. Delays and non-delivery can mean it takes longer to get paid, or you don’t get paid at all.

Delays in some large contracts can make you liable to pay liquidated damages to your customer as a penalty for late delivery. Late or non-delivery can also lead to termination of an agreement, and possible litigation, costing your organisation millions in lost revenue and damages.

Contract lifecycle management software helps mitigate the risk of non-compliance in your customer agreements by automating your contract management processes for everyday tasks. Contract lifecycle management can make these processes available to your whole organisation providing corporate consistency, accountability, and auditability.

The biggest risk is not knowing what your risks are. If you do not know what is in your contracts, then it may be time to have a look. How long does it take you to find a document and associated contract files?