A guide to contract management for small businesses in 2024

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.

2. Automate contract creation

Drafting each and every contract from scratch simply isn't feasible for most small businesses, especially as contract volumes scale ahead of headcount.

Fortunately, there are a few things you can do to reduce this manual admin work and generate contracts faster, like setting up contract templates that serve as a strong starting point.

Although this can be set up across Micrsosoft Word and shared drives, it's safer and more efficient to leverage a contract management solution like Juro where these templates are automated.

With Juro, users can generate contracts in just a few clicks, either by pulling data in from other business systems, like a CRM, or by completing a simple Q&A form. This eliminates the need to manually populate template fields and empowers commercial teams to self-serve with confidence.

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3. Streamline collaboration and negotiation

There is an increased need for collaboration within small businesses. With low numbers of staff, people will naturally be expected to chip in where they can. Even when your business begins to scale, there will always be a need for collaboration across departments, as contracts affect all business areas.

This can be messy when requests are shared and actioned across different communication platforms and document versions. It's far easier when you facilitate real-time collaboration on documents through a solution like Google Docs or Juro.

For example, Juro enables users to collaborate on and negotiate contracts in real time. They can add comments, redlines and suggestions, which counterparties or colleagues can respond to either in a comment thread or by approving or rejecting their proposal.

This streamlines the discussion, helping you reach an agreement faster.

4. Set clear roles and responsibilities for approval and signing

It's not unusual for the roles and responsibilities of small business employees to blur, especially when it comes to cross-functional documents like contracts. But if you want contracts to progress, someone needs to take ownership of them.

This can be as simple as listing authorized signatories in a playbook of some sort, or setting up automated approval workflows in a platform like Juro to make sure risky terms don't fall through the cracks for high-value agreements.

The more granular this guidance is, the better. It eliminates confusion and ensures contract-related tasks don't disappear into the abyss waiting for someone to action them.

What is the best contract management software for small businesses?

Juro's AI-enabled contract automation platform enables legal & business teams to create, execute & manage 10x faster than traditional tools, protecting your time for higher-impact initiatives.

The end-to-end platform powers the entire contract lifecycle from initiation through to renewal all within a secure, browser-native environment.

Juro works with fast-scaling businesses like Trustpilot, Soundcloud and WeWork to streamline contract workflow and gain better insight into contract data, but we also worth with smaller teams looking to do more with less.

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Unlike heavyweight, legacy contract tools, Juro is easy to use and implement, with the highest adoption of any CLM, according to G2. This makes it perfect for small teams that don't have the time or resources to support with a long and expensive implementation.

To find out how Juro can enable you to reduce the time your small business spends on contracts by 90 per cent, fill in the form below.