Introduction
Businesses must prevent supply chain interruptions and compliance breaches to avoid unfavourable publicity. Such occurrences might cause major financial losses and brand harm. Hidden contract risks contribute to these issues. These risks can be harmful if not discovered and handled adequately due to contractual commitments and poor procedures and tools. Contract visibility and risk management are crucial as contracts regulate approximately 80% of corporate transactions. This book discusses how to identify major hidden contract hazards and improve your company’s contract management.
Hidden contract flaws
Most major firms have deep fault lines caused by contract invisibility and risk management. These fault lines are typically concealed in your contract responsibilities and the procedures and tools used to manage them throughout the contract lifetime. These contract risks are not buy-side or sell-side specific. The range of contracts includes non-monetary ones like employment and IP.
Over 80% of company transactions are contractual.
Poorly implemented contracts increase risk. Contract risk identification and management are essential for good judgements. Big companies are mature at assessing contract risks during negotiations but seldom can monitor them afterward. That’s why contract risk must be considered individually and collectively throughout the lifespan.
How much contract risk does your organisation face?
Insufficient visibility, rapidity, standardisation, and compliance cause most contract risk and exposure pre- and post-execution. Our easy contract risk assessment tool scores risk across six main areas by asking a series of questions. Free, personalised reports are available in under five minutes. Your report will cover typical exposure sources and mitigation methods in pages.
Learn how using the risk assessment:
- Missed commitments, expirations, and other contract milestones can cost money.
- Contract visibility must span multi-tier supplier networks.
- Contract visibility improves supply chain analytics.
- A week vs three weeks to execute a deal might alter everything.
- Leading businesses handle non-standard contract wording, template variations, and maverick contracting.
Conclusion
Protecting your company’s finances and image requires identifying and addressing hidden contract risks. Insufficient contract management visibility, standardisation, and compliance might put your organisation at risk pre- and post-execution. A thorough risk assessment tool can identify these weaknesses and propose mitigation strategies. Your organisation may better manage contractual commitments and avoid interruptions and failures by improving contract visibility, optimising procedures, and assuring compliance. Proactive contract risk management protects your business’s future and competitiveness.
