Managing supplier contracts can concern all departments of a company. In general, in collaboration with the purchasing department, an entity manager allocates his budget as needed for his operations. A lack of vigilance can lead to financial issues in no time. So how can you ensure optimal management of your vendor contracts? How should you coordinate this day-to-day management with the purchasing department?
Monitor all of your supplier contracts
Whether it includes service providers or vendors of computer or office equipment, the list of vendors is often long and exhaustive. For this reason, an error quickly occurs if department managers do not ensure rigorous monitoring of their vendor contracts: a missed contract renewal or, on the contrary, an omitted termination can have serious consequences.
To ensure this does not happen, you can use a simplified solution, which is the utilization of a shared board directly accessible by the purchasing department.
The shared board may display each department’s allocated budget as well as the details of the service or product provided, including the deadlines association with contracts’ expiration. The characteristics of the board are easily modifiable based on their relevance for each service.
Here are some examples of the information to mention:
• Contract manager;
• Vendor’s company name;
• Description of the service;
• Contract (to be attached);
• Start date of the contract;
• Recall date;
• Expiration date of the contract;
• Annual amount;
• To terminate (a possibility of check), etc.
Vendor management beyond the administrative aspect
The purchasing department is responsible for the overall management of the company’s vendors. The purchasing manager may decide to keep the lists of vendors who have responded in the past to different tender calls issued by the company. Thus, the vendors who are not retained at a given moment will be able to be considered again in the future based on the company’s needs. The time saving is not immaterial! These potential vendors may be mentioned in a collaborative tool (vendor’s company name, tender title, date of issue, commercial proposal, key contact details, defense completion status, reason for refusal, etc).
The recall date associated with a future contract expiration may be used to create a new chance to compete for the vendors on the market in order to avoid economic dependence. At the same time, these recall dates can result in the planning of quarterly or annual check points between the client and its vendor in order to measure the level of satisfaction with the partnership. Thus, the renewal of the contract may be considered at this stage.
Managing your vendor contracts carefully, you will avoid unpleasant financial surprises and will nurture your vendor relationships.
The monitoring as well as visualization of your multiple partners will be facilitated by collaborative tools from the range offered by RowShare. You can set them up now and adapt them to your needs!