Every company manages contracts, just at different scales.
Whether you're an enterprise partnering with hundreds of suppliers, or a startup onboarding their first freelancer, how you manage these contracts matters.
Without the right tools and processes in place, contracts become a bottleneck to growth, slowing down business-critical processes like customer acquisition and hiring.
Small businesses can't afford for these risks to materialize, so it's important for them to have a reliable contract management process or solution in place. That's where we can help.
The state of contract management for small businesses in 2024
Contracts formalize every transaction you make, every customer you win, and every new hire you bring into your team.
The problem is, small businesses have a habit of carrying out transactions and agreements informally to reduce cost, time, and burdens on resources.
Perhaps they don't have the infrastructure or templates in place yet, or there's no one to take ownership of these legal agreements. Without that accountability, it's easy to get complacent.
However, the risks associated with conducting business without contracts are huge, especially for businesses that are just starting out.
For example, it's estimated that 84 per cent of small businesses have fallen victim to late payments, with the amount owed to SMEs in late payments sitting around £14bn and impacting a third of these companies.
As many small businesses know all too well, cash flow is critical to keeping your business afloat, and delayed payments can jeopardize your success, or worse, cause a small business to fall into debt.
Contracts enable you to enforce your payment terms and protect your assets by putting legal provisions in place.
But simply having contracts in place is one thing. Managing those agreements effectively is another.
Who manages small business contracts?
In most small businesses, an in-house lawyer will typically ‘own’ the contract process. However, if your business is still in its infancy, you may find yourself without a legal department, in which case contract management duties will usually fall to the Chief Financial Officer, the Chief Operating Officer, or even the CEO.
This means that important contracts will often be passed back and forth between different individuals and departments, many of whom will not have a legal background or any experience managing contracts.
This is another reason why contract management systems are so useful for SMEs, as they make the contract process more collaborative, accessible, and easy to use - even without experience.
How to unlock effective contract management as a small business
An effective contract management process can transform the way your business operates, reducing the time wasted on routine contract admin and empowering you to focus on the tasks that really move the needle for your growth.
To help you unlock this, let's explore a few best practices and opportunities you should be taking advantage of - if you aren't already.
1. Centralize records and storage
Leasing a generously sized office space is often out of the question for SMEs, which makes storing hard copies of contracts in one central location a real challenge. What’s more, many businesses have moved towards a paperless office anyway in a bid to keep mess and fuss to a minimum.
Contract management software like Juro offers a fast and efficient way to store contracts securely. Unlike physical storage solutions which are vulnerable to loss and destruction, contract management solutions store documents indefinitely, and behind multi-layer passwords.
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With Juro, you can organize and query your contract data in real time. Contracts are built as structured data and stored in a secure contract repository where you can review all of this data in one place by building a custom contract dashboard.
This makes it significantly easier to audit contracts and stay compliant with data protection rules and regulations. It also means you spend less of your valuable time searching high and low for specific agreements ahead of a termination or renewal. To find out more, hit the button below to see Juro in action.