So you've found the perfect vendor or customer for your SaaS business who fits the bill (both literally and figuratively). You negotiate prices, agree on the contract terms, and sign the paperwork.

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So far, so good.

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But what happens after this?

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How do you ensure the contract is executed seamlessly without delays or disruptions?

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For SaaS businesses juggling multiple vendor contracts, post-signature tasks can often spiral into chaos. In fact, contracts are one of the leading causes of legal disputes, and poor management can lead to businesses losing 9% of their annual revenues. This inefficiency further translates to missed opportunities, delayed contract renewals, and non-compliance risks for SaaS businesses.

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Without a system to streamline this process, you risk lost time, wasted resources, and costly disputes.

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This is where a strong contract administration plan comes in. It outlines all essential contract details both parties must know to avoid any disputes later. With a well-structured plan, you can streamline processes, automate repetitive tasks, and ensure seamless contract implementation and management.

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What is a Contract Administration Plan?

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A contract administration plan is like your go-to playbook for managing contracts seamlessly throughout their lifecycle. It keeps all the moving parts in check so you can meet obligations, stay compliant, and avoid any last-minute complications. It streamlines post-signature tasks, helping you:

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• Fulfill the agreed contract and legal terms
• Track renewals
• Mitigate compliance risks

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For SaaS businesses dealing with recurring subscriptions, a contract administration plan isn't just useful—it's critical. It reduces risks and inefficiencies and lets you focus on what really matters: scaling your business.

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For example, suppose your team has finalized a contract for a new client's software integration. The contract deliverables include:

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• Setting up API access within two weeks
• Conducting a training session
• Creating custom reports by the end of the first month

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However, your contract administrator suddenly calls in sick. Without a plan, your team could be left scrambling through emails and Slack threads. But with a contract administration plan in place, everything is neatly laid out—no stress, no confusion, no dropped balls. In short, the plan acts as a safety net, preventing confusion even in the absence of key stakeholders.

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It typically includes 4 key details:

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• Deliverables
• Timelines
• Delivery channels
• Key stakeholders

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How to Create a Contract Administration Plan?

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A solid contract administration plan helps you maintain compliance, minimize risks, and boost efficiency. But where do you start?

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Here are some actionable steps to create a plan that can help you manage lengthy contracts seamlessly:

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Step 1: Outline the Goals and Scope of the Project

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The first step in creating a contract administration plan is clearly outlining the project's goals and scope. This ensures that both parties are aligned and agree on the same objectives.

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'Understanding contracts thoroughly is indeed crucial for effective contract administration. Being familiar with the scope, deliverables, milestones, payment terms, and performance standards enables proactive management and monitoring of contractual obligations,' explains Contract Manager Ahmed Elshourbagy.

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Here's how you can define the project scope of a contract:

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• Set SMART objectives (specific, measurable, achievable, relevant, and time-bound).
• Highlight key deliverables: What needs to be done and when?
• Include contract limits to prevent scope creep.
• Collaborate with the entire contract management team to ensure everyone is on the same page.

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Step 2: Define roles and responsibilities

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Confusion over who's doing what can lead to delays and awkward finger-pointing. Therefore, you must clearly define all key stakeholders and assign responsibilities to ensure an efficient and seamless process.

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You can easily do this using the RACI matrix:

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• Responsible: The person directly working on the contract.
• Accountable: The person answerable for the contract.
• Consulted: The experts providing input.
• Informed: The people who need updates on progress.

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It's simple, effective, and keeps everyone in their lane.

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Step 3: Identify Performance Metrics

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How do you know if a contract is on track or veering off the rails? Enter performance metrics. These KPIs help you measure success and ensure everyone's holding up their end of the deal.

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Dattaram Karivadekar, an Administration and Facilities expert, suggests 5 tips to define contract management KPIs:

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• Define key performance indicators (KPIs) to track progress, quality, cost, and time.
• Establish contract performance standards for minimum acceptable service or output levels.
• Align measures and standards with contract objectives and scope.
• Ensure clarity and understanding of KPIs and standards among all parties.
• Regularly monitor and evaluate contractor performance against set measures and standards.

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Step 4: Set Down Monitoring and Reporting Procedures

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We get it—monitoring and reporting might not sound glamorous. However, they're essential to keeping contracts running like a well-oiled machine and help in running evaluations of contractor performance.

Without clear monitoring and reporting procedures, you risk:

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• Missed deadlines
• Shoddy deliverables
• Non-compliance
• Strained vendor or client relationships

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For example, suppose your team has signed a contract with a third-party vendor for software integration. Your monitoring and reporting procedures could include:

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• Specifying deadlines for each phase of the integration
• Regular reports to track expenditures against the agreed budget
• Terms for service delivery and quality standards

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Step 5: Define Communication Channels

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Communication can make or break a project. The fix? Set clear, secure, and efficient channels upfront. Pick tools and methods that are accessible to all stakeholders—because, let's face it, no one likes sifting through 20 emails for one update.

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'In my experience, setting clear expectations from the start and having regular check-ins helps keep vendor communication on track. Also, using a shared platform for updates can be a game changer for responsiveness,' explains Grayr Adzhemyan, CEO at Samolet Plus Global.

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Without clear channels, you risk miscommunications, confusion, and delays.

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Step 6: Implement a Vendor Management System

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A good quality vendor management system is non-negotiable if you're managing multiple vendor contracts. It helps you track, manage, and optimize vendor relationships in a centralized location. With a sophisticated vendor management solution, you can easily:

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• Store all vendor contracts and performance data in one place
• Monitor deliverables, deadlines, and renewals seamlessly
• Automate tasks to avoid human error and save time

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For example, with tools like Spendflo, you can streamline SaaS procurements and vendor workflows, ensuring you don't overspend or miss renewals while optimizing every contract for maximum value.

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Best Practices to Level Up Your Contract Administration Plan

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Creating a contract administration plan isn't rocket science. However, certain industry best practices must be followed to ensure seamless contract management while keeping everyone—internal teams, vendors, and clients—on the same page.

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1. Create a Centralized Database

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No one likes digging through endless folders or searching email threads for a contract. Therefore, it's best to create a centralized database for storing all contract-related formal documents. This will ensure stakeholders can easily access all relevant contract records, preventing miscommunications and delays.

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Plus, a centralized document repository reduces the risk of losing important documents, ensuring better security and smooth operations—a win-win situation for all!

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2. Clarify all Details with Both Parties

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Before finalizing the agreement, clarify all details with both parties involved. Even the tiniest misunderstanding can snowball into costly delays—or worse, legal headaches.

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Moreover, for SaaS businesses, where services live and breathe in the digital space, it is essential to ensure both parties understand renewal terms, payment schedules, service levels, and data privacy to maintain healthy, long-term relationships.

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Need more guidance? Check out our blog post on How to Evaluate SaaS Agreements and the Best Practices to Follow to ensure you tick all the required boxes before finalizing agreements

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3. Understand Contract Risks

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Let's face it: no matter how solid a plan you create, there will always be the risk of things falling through the cracks. Be it financial, operational, legal, or compliance, it's essential to understand the potential risks that could arise during the contract tenure and be prepared for it.

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This can also help you and your team identify early signs of potential complications and take corrective action to address them.

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4. Automate, Automate, Automate

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Are you still manually managing contracts? That's like using a flip phone in 2024—it works, but at what cost? Manual tasks drain time, create errors, and hold your team back. The answer? Automation. With vendor management tools like Spendflo, you can:

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• Save time by automating renewals, approvals, and reminders
• Improve accuracy by reducing human error
• Focus on strategy, not spreadsheets

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Don't just take our word for it. Research suggests a whopping 90% of businesses say automating processes has helped them reduce manual errors, complete tasks quickly, and produce high-quality work. Read our blog post on the Step-by-Step Software Procurement Process to optimize your SaaS purchases.

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5. Standardize Contracts

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Standardizing your contracts is one of the most effective ways to streamline your contract administration process and reduce legal risks. Using standardized contract templates ensures consistency across all agreements, reduces the chance of overlooking key clauses, and accelerates the contracting process.

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It also helps maintain compliance with industry regulations and company policies, ensuring every contract automatically adheres to required legal standards.

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Here are some elements that you can standardize:

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• Key terms: Payment schedules, confidentiality, IP rights, etc.
• Approval processes: Who says "yes" and when
• Compliance clauses: For regional and industry standards
• Style and format: Keep it clean, clear, and consistent

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To Sum Up

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A well-crafted contract administration plan helps you streamline operations, mitigate risks, and ensure smoother execution of contracts. However, to create an effective contract administration process, it is essential to follow certain best practices, such as standardizing contracts, clarifying details, automating manual tasks, and monitoring performance.

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With advanced vendor management platforms like Spendflo, you can consolidate all vendor data, including contracts, into a single, unified platform, enhancing system visibility and control. Its seamless ERP and P2P integrations simplify procurement workflows, enabling you to map, manage, and organize vendors effortlessly.

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Moreover, by leveraging document consolidation, all contracts—whether long-term or short-term—are stored in a centralized platform, making contract oversight simple and efficient. Spendflo takes contract management to the next level with Flo AI, an advanced tool designed to help you easily organize, track, and manage contracts.

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Ready to see Spendflo in action? Book a demo now and simplify your SaaS procurement process!

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FAQs

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1. What is the basic contract administration plan?

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A contract administration plan defines the end-to-end processes and responsibilities for managing and executing contracts. It typically includes the scope of work, timelines, roles and responsibilities, risk management strategies, and performance metrics.

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2. How do you write a contract management plan?

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Follow these steps to write an effective contract management plan:

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• Define the objectives and key deliverables of the contract
• Identify key stakeholders and their responsibilities
• Establish timelines and milestones
• Identify communication channels and reporting structures
• Set measurable performance metrics

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3. What is an example of contract administration?

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An example of contract administration could be a SaaS company managing a software licensing agreement. The company's contract manager ensures all deliverables are met on time, manages renewals, and resolves any issues with the vendor or customer.

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4. How do you write a good management plan?

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To write a good management plan, you must:

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• Define clear objectives of the contract
• Assign roles based on team members' expertise
• Specify the resources and timelines for each task
• Ensure all stakeholders are in the loop for every update or concern
• Identify potential challenges and create contingency plans

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5. What are contract administration plan best practices?

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Some best practices for a contract administration plan include:

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• Centralizing contract data
• Clarifying all details with both parties
• Understanding risks
• Automating manual tasks
• Standardizing contracts

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