How to automate a supplier agreement

Supplier agreements are key to commercial growth – how can automation make that end-to-end process easier to manage?

This deep dive looks at supplier agreements, why managing these contracts can be painful and how automation can help. Use the navigation below to find out more. 

When we talk about supplier agreements, we’re focusing on the selling of goods, while vendor agreements focus on the selling of services. Not the contract deep dive you're looking for? No problem – check out our deep dives on SaaS agreements and vendor agreements

What’s a supplier agreement? | Who do they affect? | What’s the manual process and why is it painful? | How to automate supplier agreements | Useful features | Handy integrations | Learn more

What’s a supplier agreement?

A supplier agreement, also known as a buy-side agreement, sets out the terms of the relationship between a buyer and the supplier. The agreement commits both parties to do business with each other over a specific period of time. Whether your business is a food marketplace buying produce or a retailer buying clothing, the commitments between your business and the supplier are usually confirmed in a supplier agreement.

Conceptually, supplier agreements are similar to vendor agreements – but their language and the relationship between the two parties differ. Vendor agreements tend to be more tech-focused, whereas supplier agreements have a broader purpose. And in a typical supplier agreement, the supplier (or counterparty) would also communicate more with the buyer. 

The supplier agreement is an important touchpoint between the buyer and supplier. For the supplier, the agreement confirms revenue and the possibility of repeat business; for the buyer, it’s an opportunity to detail the standards they expect when buying this product and it allows the business to keep track of spend. 

Who do supplier agreements affect?

Supplier agreements affect various teams in the business:

  • The legal team. Legal are responsible for negotiations with the counterparty’s legal team. The contract process can be painful as it involves a lot of manual, low-value work – which only increases as the business grows.

  • The procurement team. This team is responsible for negotiating commercial terms in the contract.

  • The finance team. The finance team, often led by the CFO, authorizes spend on the agreement, and owns the payment process. Finance have to formally approve the contract and before it’s sent to the supplier. When companies don’t have an established finance team, this is often handled at an executive level.

  • The business stakeholder. This is the person or team using the supplies being purchased and may be anyone in the business.

  • Contract managers. They are responsible for managing the supplier agreement after it’s been signed. If businesses don’t have contract managers, legal or procurement teams usually take ownership of post-signature management.

Legal or procurement may be juggling multiple agreements at one time. And to make matters even more complicated, important information (like renewal dates) isn’t always clear

What’s the manual process?

The supplier generates an agreement, usually in Word, with pre-defined terms, which they send to the buyer. There isn’t usually a process for drafting this type of agreement – and depending on the power dynamics between both parties, there may not be room for negotiations. For example, if the supplier is a massive corporation, and the company buying the product is an early-stage startup, the supplier may not flex on terms.

In cases where negotiation does happen, it often involves lengthy back-and-forth email chains between legal teams on both sides. This is time-consuming, and makes it difficult for parties to manage version control and keep track of changes. Eventually the parties will agree and sign the contract with a wet signature or via an eSignature tool like DocuSign. All stakeholders receive a copy of this signed agreement, which they store on personal desktops or in a shared folder – or worse, print it out and shove it in a filing cabinet, never to be seen again. 

This lack of management post-signature is where the real pain for the buyer starts. Usually the legal or procurement team, who are responsible for keeping track of renewal dates, manually update a spreadsheet with key details from the contract. This can be a huge time drain, especially for scaling companies increasing the volumes of their supplies and therefore the number of supplier contracts being agreed. Legal or procurement may be juggling multiple agreements at any time. And to make things more complicated, important information (like renewal dates) isn’t always clear and finding them can involve a lot of digging on legal’s part. If the business misses key deadlines, the contract auto-renews, the company incurs a cost and legal are often blamed. 

Why it’s painful to manage supplier agreements manually

A manual contract process can be painful for various reasons. Common pain points may include: 

  • Multiple systems: “We move between several systems - emails, phone calls, Word documents, PDFs, eSignature tools… and this can lead to problems with version control.”

  • No oversight: “There’s no unified system for contracts. Different teams are sending out agreements with no oversight from legal. People are freestyling terms, which increases the risk for the business, and there’s no way to keep track.”

  • No central source of truth: “Signed contracts are filed in a shared drive, on a personal desktop, or even printed and stored in a filing cabinet.”

  • Missed renewals: “Tracking key data is such a manual process; it leads to missed renewal deadlines. The business ends up spending more than they need to, and legal gets the blame.”

These points often drive companies to automate their contracts. 

As the supplier, it’s important from a branding perspective to send out beautifully designed and engaging contracts

How to automate supplier agreements

Negotiate in real time

An automated workflow can help streamline negotiations between you and the supplier. A contract collaboration platform allows you to make suggestions and edit the agreement in-browser, on a single version of the document. Both parties are notified of changes in real time via Slack or email notifications, keeping everyone in the loop.

Approve in seconds

Usually, several teams are involved in the supplier agreement process, but with a contract collaboration platform, legal can have oversight and retain approval rights. Automation can help you set up an approval workflow to make sure legal has the final say on all documents before they’re signed. 

eSign anywhere, anytime

An automated system with native eSignature reduces friction in the signing process. Both parties can sign the supplier agreement digitally, at any time, from any device. Once signed, the contract is automatically sent to both parties as a PDF. 

Create dynamic, searchable contracts

An automated workflow ensures your contracts are built on structured data, so they’re dynamic and searchable from day one. Contracts are agreed and managed in a unified workspace, so legal can rest assured knowing they can find the information they need in a couple of clicks.

Say goodbye to missed deadlines

Vendor agreements may auto-renew, but an automated workflow with valuable contract insights allows legal and procurement teams to track each contract and set up renewal reminders. Teams can stay ahead of key dates and deadlines, no problems.

Want to automate your supplier agreements? Download the ‘Modern contract handbook and future-proof your contract process. 

Useful features

If you want to automate the end-to-end supplier agreement process, you should consider a contract collaboration platform with the following features:

  • Commenting. Being able to comment and negotiate without leaving your browser can help you streamline the negotiation process and maintain an audit trail of changes.

  • Device-optimized eSignature. Sign agreements easily anywhere, at any time, on any device. A native eSignature feature can help you decrease time-to-sign and minimize delays in the process.

  • Renewal reminders. Keep track of all your renewal deadlines with the notifications feature. Make sure your contract collaboration platform allows you to assign a reminder to the certain person, or team, for an even smoother process.

  • Searchable repository. Having all your contracts in one place is super useful – if your documents are built from structured data, you can find what you need in seconds. Legal can search and filter supplier agreements by renewal date or other key terms, thanks to your contract collaboration platform’s metadata tagging.

  • A dynamic text editor. As the supplier, it’s important from a branding perspective to send out beautifully designed and engaging contracts. Tables, charts and images in your rich, no-code editor will allow you to simplify information in the supplier agreement, leading to a faster signature and happiness on both sides.

Handy integrations

  • Slack. Receive notifications in Slack every time someone makes changes to the contract. Slack notifications also let you know when the contract has been signed, offering full visibility on the process.

  • Email. With these notifications, you can make sure the contract process doesn’t lose its momentum.

  • Google Drive. A shared drive integration means that signed contracts are automatically downloaded and securely stored.

  • Excel. Export your contract data into a spreadsheet so you can easily share insights with other teams in the business.

  • Calendar integrations. Stay ahead of the game with upcoming dates and deadlines

  • Business intel tools. Integrate tools like Looker and Tableau to handle all your contract data effectively.

Automate your supplier agreements with Juro

Is managing supplier agreements a pain point for your business? If your contract process involves multiple systems, with no oversight and a lack of version control, try Juro.


Topics: Supplier agreement

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