Various departments in a company can confuse work peers. With that being said, a common mistake is that people tend to interchange roles like human resources managers and contract managers. On the surface, they can seem pretty similar, but each role demands specific skill sets, expertise, and knowledge.
Today, we’ll dig a bit deeper into contract management—their duties, contract management tools, and who qualifies to be one. If you’re curious, keep reading!
What Is Contract Management?
Contracts are an integral part of any business; that’s why contract management is crucial to enable companies to work with suppliers, customers, vendors, partners, and employees. Here are the different stages that you need to consider:
- Initiation: Here, a company proposes to enter into a business relationship with another entity, which leads to contract creation.
- Negotiation: After creating the contract, both parties must reevaluate the terms and conditions and decide on a mutually beneficial agreement.
- Approval: Once both parties agree with the provisions, both entities need to sign the contract, promising to execute everything in the contract.
- Termination: Termination can happen after the contract has been fulfilled, there’s a need for renewal, or if a party doesn’t follow the terms listed in the contract.
For human resources, contract management is used to create employment contracts that will benefit both employer and employee. This manages any legal issues that may arise within the contract period.
Overall, contract management is designed to ensure that the company remains profitable and financially successful by creating fulfilling partnerships with other entities through sound contracts.
What Is the Role of a Contract Manager?
Contract managers are responsible for administering, directing, and coordinating projects, as well as negotiating and communicating with potential partners and entities. Besides that, they are also responsible for writing the agreement and creating records of the progress of each project and if contracts are being followed.
These individuals are meant to guide project managers and operational staff as well as maintain a healthy relationship with the company’s partners. On top of that, contract managers also report their findings with investors and stakeholders and consult with financial advisors to understand the impact of the contracts on the business.
Creating beneficial contracts for the business is crucial for contract managers since they need to ensure that trends, risks, and salient points are identified. This helps the company make necessary changes to improve the operations of the business.
Thankfully, contract management tools can help streamline their workflow, allowing them to focus on ensuring the validity of each contract and creating helpful reports to help their company flourish.
Who Can Be a Contract Manager?
Besides having impressive leadership, negotiation, and interpersonal skills, contract managers should also know how to interpret and analyze legal documents and financial reports to evade operational risks and protect the business.
With that being said, proper training is required for contract managers to acquire the right skills and knowledge to deal with legal contracts for your business. Besides that, having the right skills can help mitigate risks, allowing you to create successful collaborations with partners that could help your business flourish in a competitive landscape.
The Bottom Line: So, Can HR Managers Be Contract Managers?
Although many think that merging two roles can be a practical and inexpensive move, contract management may be quite complex. So if you let your HR managers handle contracts on top of managing your company’s workforce, the load may be too much for them.
For that reason, it’s best to delegate contract management to a single person and train them to learn content-specific expertise and contract management tools to improve your business’s contract processes.
How Can We Help You?
Contract management is no easy feat; that’s why you must incorporate the right tools in your workforce to ensure an organized and streamline workflow that would benefit all parties.
Anapact is a contract management software that provides effective contract management solutions for small and medium-sized businesses. We strive to reduce your risks, empower your team, and streamline your workflow with our contract management software.
Are you looking for a contract management tool? Try our software today!