Contract lifecycle management (CLM) is an important process for organizations of all sizes. It basically helps organizations track and manage the various components of a contract, from the moment it’s signed to its expiration date. By utilizing CLM software or processes, companies are able to make sure that contracts are properly managed and compliant with applicable laws, regulations, and industry standards.
Stage 1: Contract Creation
The first stage in the contract lifecycle management process is created. This involves drafting a document that clearly outlines the terms and conditions of an agreement between two parties. The drafted document should be reviewed by both sides before it is officially signed off on by all involved parties. When creating a contract, it’s important to ensure that all parties understand the terms and conditions outlined in the document.
Stage 2: Contract Negotiation
The second stage in the contract lifecycle management process is negotiation. This involves both sides discussing their respective interests and attempting to reach an agreement on any points of contention. During this stage, it’s important to ensure that all parties are aware of what they are agreeing to and how each party will benefit from the deal. It’s also important to make sure that both sides have enough time to review the proposed contract before signing it off.
Stage 3: Contract Execution
The third stage in the contract lifecycle management process is executed. At this point, both parties must officially sign off on the document to make it legally binding. It’s important to ensure that the contract is signed off on by all involved parties in a timely manner and that all signatures are witnessed.
Stage 4: Contract Monitoring
The fourth stage in the contract lifecycle management process is monitoring. This involves tracking the progress of any contracts throughout their life cycle and ensuring compliance with the terms and conditions outlined within them. During this stage, it’s important to keep track of things such as amendments, renewals, extensions, or modifications made to a contract over its lifetime. It’s also important to make sure that both parties adhere to the deadlines stated in the document and follow up accordingly if any deadlines are not met.
Stage 5: Contract Closure
The fifth and final stage in the contract lifecycle management process is closure. This involves the termination or expiration of a contract. Once a contract has expired, it’s important to review any documents associated with it and make sure that all parties have received and understood any changes that might affect their rights or obligations under the agreement. If a dispute arises between two parties, it’s important to seek legal advice as soon as possible before taking any further action.
Contract lifecycle management is an important process for organizations of all sizes to ensure that contracts are properly managed from start to finish. By following each stage outlined above, companies can ensure that contracts are created correctly, negotiated effectively, executed properly, monitored closely, and closed effectively. With a good CLM system or process in place, companies can rest assured that they are compliant with applicable laws, regulations, and industry standards. At SirionLabs, the CLM system follows all the stages to help manage the contacts easily. Contact us if you require any CLM Systems for your businesses.