How To Best Leverage Contract Management and Negotiations To Drive Cost Out of Your Business
Whether we’re in a bear or bull market or grappling with pandemic-related challenges, businesses are always looking to increase value and reduce costs. According to World Commerce & Contracting, companies lose an average of 9% of their annual revenue due to contract-related issues each year. Strengthening contract management initiatives is a good place to start when it comes to implementing cost reduction strategies for your business.
From improving process efficiencies to decreasing revenue leaking, contract management plays a vital role in ensuring negotiations, timelines, productivity and deliverables are all operating at an optimal – and profitable – level.
Through expert contract negotiation and contract management services, your company can leverage a team of knowledgeable consultants to handle contracts through each stage of their lifecycle. By establishing the right framework, you’ll be able to mitigate risk, cut supplier contract costs and optimize business continuity.
Drive Business Growth via Cost Reduction Strategies
Leveraging contract management consultants can help cut unnecessary business costs, while simultaneously exposing vulnerabilities and process inefficiencies. Cost reduction strategies can include everything from eradicating billing errors and eliminating unnecessary services to renegotiating contract terms and utilizing more cost-effective suppliers.
Every tweak and change that’s implemented can contribute to a more streamlined process, ensuring nothing slips through the cracks – such as a contract expiration. Through expert contract negotiations, your organization has the opportunity to reduce expenses (without losing revenue) and eliminate unnecessary services. You’ll also be able to uncover areas where you can use a more competitive supplier without compromising quality and reliability.
Constantly Reassess and Negotiate Contracts
Let’s face it: companies simply don’t have the internal resources needed to continuously evaluate and negotiate contracts – regardless of if it’s with suppliers, customers, contractors or other relationships. However, conducting frequent negotiations is a vital piece of the cost-savings puzzle.
First, because the price of items constantly fluctuates, it’s important to safeguard your business by ensuring purchases are made under contracted pricing terms. Secondly, when you don’t have an organized contract management system in place, documents get misplaced and details go unnoticed, which can lead to costly errors.
For instance, if your company switches the type of printers it uses, and it gets overlooked that printer cartridges aren’t covered under the contract, you’ll continue losing money until someone renegotiates the terms of the agreement.
While many businesses wait years to revisit and renegotiate their contracts, we recommend reviewing documents every 6–12 months in order to cut supplier contract costs, protect business interests and ensure you’re maximizing cost-savings.
Now, more than ever, it’s important for companies to be strategic about their contact management process. At Concannon, our experts help businesses establish the infrastructure needed for long-term success. From cost reduction strategies to contract management, contact our team today to learn how we can help drive business growth.