Case Study: Keeping Track of the Fine Print with Contract Management Software.
As your business is out growing its early stages is easy to forget about the past promises that you did to your first clients in order to get their business. Young companies often agree to any contract modifications that their customers request in order to start a client portfolio.
Also, upon their founding most companies are without the benefit of contract management software because they believe that it is not a necessary investment. The reality could not be further away from the truth. Here is a brief business case study on the importance of keeping track of the fine print of your contracts with a contract management software solution.
The Distribution Rights Example
Imagine that your company is the manufacturer of iPhone accessories and that after five years of hard work you have established a solid client portfolio across several states. Business has grown so fast that you barely can keep with your backlog of orders. Most of your time is spent in filling orders from your clients as soon as possible. Life is good.
You’re particularly proud of having been able to squeeze in time to get 20 additional contracts for the state of Florida. Your team of sales people has been really busy with this project. It has been over a year since you had any additional clients from that state and you cannot put your finger on why you had not pursued additional business from that state. After three months of activity, orders from this state are booming.
One morning you arrive to work and you notice you have two voicemails from your first client ever from Florida. Before listening to them you decide to check your email and you notice that you have three emails from the same client on your inbox. Just as you are about to open one of them, you get another call from your client. He is not happy. He reminds you that one year ago you had agreed to give to him all distribution rights in the State of Florida.
Even worse, he has talked with his lawyer and his lawyer indicated that your client has a strong case against you. He is yelling on the phone and he is letting you that he wants an immediate order from you for all iPhone accessories taken off the shelves of his competitors by the end of the week, a public apology and a hefty settlement for lost revenues – for starters.
Keeping Track of the Fine Print
You could easily replace “iPhone accessories” with just about any product and service, however the outcome will always be the same: this situation could have been easily averted by implementing a contract management system early on. This distribution rights case study demonstrates that the opportunity cost of not having such a system in place is just too high.
Young companies typically agree to just about any contract modifications that their customers request as they are growing their business. Keep track of those promises throughout the life of your business through contract management software. Remember that a contract management can grow as your business does. For example, Contract Logix offers three editions of its contract management software:
- Group: Complete contract management for groups & small businesses (up to three users).
- Professional: Powerful contract management for any size company (unlimited number of users at a single site).
- Enterprise: Robust contract management across your entire enterprise (unlimited number of users at multiple sites).
Takeaway
Keep track of you contract modifications at all times. Avoid preventable legal problems by using a reliable contract management software that can be upgraded as your business grows. Not only will you have increased contract compliance but also you will have improved knowledge of contract language consistency.
Image Credit: Western Area Power
