Contract Management Process - From Registering to Termination
There are various ways to set up the Spend Cloud Contract Management module. When a long-term relationship is entered into with a supplier, a (purchase) contract is often drawn up. The contract includes agreements on terms such as duration, costs, and the types of goods and/or services involved. This article provides a high-level description of how the Spend Cloud contract management process aligns with this. The starting point is to strive for the ideal work process, the so-called "best practice" method.
1. Adding a Contract
Within the Spend Cloud, a contract can be added via two menu items: the "Add" menu and the "Mailbox" menu. You can send a contract to the mailbox using the email address [customername]@contract.spend.cloud. Recommendation: Create an internal contract email address (e.g., procurementcontracts@[customername].nl) and have it forwarded to the Contract Management mailbox address. This internal address can be communicated to the rest of the organization so that signed contracts can be delivered to a central location and immediately forwarded to the Spend Cloud for further processing. When an email has multiple attachments, you can specify in the mailbox which file is the new contract, whether other PDF files should be added as subsequent pages, or if a file should be processed as an attachment.
2. Registering a Contract
After a contract is added to the Spend Cloud, you can fill in the contract details in the Register menu item.
- The contract first undergoes Optical Character Recognition (OCR) before appearing in the registration section. If an IBAN, VAT, or Chamber of Commerce (KvK) number is recognized on the contract, the relation information may be filled in automatically.
- The relation (creditor) must be available in the Spend Cloud; if not, you can request the accounts payable department to create a new creditor via the "Ask Opinion" feature. You enter further data into the fields during registration. Some fields are mandatory (marked with an asterisk "*") and others are optional; these fields primarily help with later reporting or searching.
- Continue the registration by filling in the contract period fields. Here, you enter the duration, applicable costs, and the type of contract.
- Once all fields are completed, the contract can be submitted to become an active, ongoing contract against which invoices can be settled.
3. Confirming a Contract (Optional)
This step is optional. You may have chosen to let the contract owner partially complete the registration or require the contract owner to confirm the registration. The contract owner can approve, put on hold, or reject the registration. Once a contract is approved, it becomes active. Any involved parties (stakeholders) will be informed of this via a notification.
4. Consulting an (Active) Contract
In the Archive, you will find an overview of all contracts (both active and inactive) in which you are or have been involved—for example, as a contract owner or stakeholder. A contract administration employee can view all contracts by default. In the archive, various details regarding the contracts can be displayed or edited.
5. Notifications and Contract Actions
Based on the information entered during registration, alerts will be triggered leading to actions within contract management. This mainly concerns reviewing a contract, where the contract owner (final person responsible) must indicate whether the contract should be renewed or terminated. This is an essential step in the process to prevent unnecessary renewals and to make new contract agreements with the supplier in a timely manner. Read more about contract e-mail notifications here: The notification emails within the Spend Cloud - Contract Management
6. Executing Actions on a Contract
Various actions can be performed depending on your role within contract management. For contract owners, the action is often to review a contract (renew or terminate). The actual renewal (registering a new contract period) or termination is often handled by the contract administration.
Renewal: The contract remains active for an extended period.
Termination: The contract receives the "Expiring" status and will change to "Terminated" on the specified end date. After that, the contract can only be consulted via the Archive.
PLEASE NOTE: Renewing or terminating a contract refers only to the administrative action within the Spend Cloud. Therefore, coordinate internally to determine who is responsible for communicating renewals and cancellations to the supplier. Ideally, contract administration is responsible for further steps, though they may request the contract owner to contact the supplier directly if specific technical or professional knowledge is required for the renewal.Related Articles
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