Inflexible workflows increase time-to-sign and cause friction between teams. How can you make your vendor agreements scalable?
This deep dive explores the vendor agreement workflow – who they affect, why you might need to scale your workflow, the benefits of doing so, and more. Use the navigation below to find out more, or explore our deep dives on other contracts, like MSAs and SaaS agreements.
What’s a vendor agreement?
A vendor agreement sets out the terms and conditions of a purchase, and is an important touchpoint between the buyer and the seller. For the vendor or supplier, the agreement confirms revenue. For the buyer, it’s about keeping track of spend.
Who owns vendor agreements?
Once a vendor agreement has been signed, the procurement team is responsible for managing renewals. If the business doesn’t have an established procurement team, the legal team will take ownership of these agreements. In an automated workflow with dynamic and structured document storage, the agreement owner can track and manage renewal dates and search for earlier versions of key terms. This frees up valuable time for legal.
Who approves vendor agreements?
Legal oversee the vendor agreement process and have final sign-off; the procurement team are involved in negotiating and agreeing the contract’s commercial points.
Who are the authorized signatories?
Authorized signatories are usually CEOs or someone from the leadership team. Depending on the size of the business, the CFO may also be an authorized signatory, or they may delegate authority to sign. An approval workflow with native eSignature streamlines this process and speeds up signing.
Who do vendor agreements affect?
The vendor agreement process affects several stakeholders in the business:
The legal team, who is responsible for negotiations and redlining.
The procurement team, who is responsible for the purchase itself and for negotiating the commercial terms in the contract.
The business stakeholder, who is the intended customer and will be using the goods or services. The business stakeholder can be an individual or a team.
The finance team, who keep track of spend and authorize payment.
Why scale your vendor agreement workflow?
If you’re reaching an agreement and getting a signature on the dotted line (most of the time), then why does it matter if the process isn’t scalable? Well, scaling your vendor agreement workflow helps you to avoid problems as your business continues to grow, and also there are many benefits to implementing a scalable workflow early on.
Optimize to save valuable time
As your company grows, so does the workload. You won’t want to waste time negotiating and managing low-value contracts. But a process that involves jumping between systems and hunting for signed documents isn’t going to cut it when you go from one agreement a month, to five, to fifty, to hundreds. To free yourself up for high-value work, you need to optimize every stage of your vendor agreement workflow.
In a growing business, things change. You need to be able to find signed documents and reflect those changes at speed and at scale
Self-serve to keep up with demand
At a high-growth scaleup, the company might be adding hundreds of employees – but legal teams don’t grow proportionally with the rest of the business. Without a scalable process in place, in-house legal teams can quickly get buried by requests. At tech scaleups, legal may end up juggling several vendor agreements at a time, as these naturally innovative businesses invest in different tech solutions. A company can only meet this demand with a scalable workflow that enables teams to self-serve.
Unify your workspace to reflect changes at scale
In a growing business, things change. The company’s commercial redlines are likely to shift, but if you have to hunt through shared drives (or worse, paper copies in a filing cabinet) when they do, then there’s a greater risk of agreeing contracts with the wrong terms - and this could have serious consequences. If things change, you need to be able to find signed documents and reflect those edits at speed and at scale.
How to scale your vendor agreement workflow
The following steps will help you to create a process for your vendor agreements that is collaborative, flexible and scalable.
Design the perfect vendor agreement
Your template will be used to create all your self-serve vendor agreements, so it needs to be perfect. Use your contract collaboration platform’s in-browser editor to design the perfect agreement that buyers want to sign. Make it readable and user-focused, foreground key terms like renewal deadlines and optimize for user experience. Use tables, charts and images to personalize and simplify your contracts, making your business more human in the process. The better the buyer experience, the more likely they are to return for repeat business.
Codify your playbook
Identify the points you’re willing to concede. Can customers signing high-value contracts negotiate on data usage? Is auto-renewal negotiable for smaller customers? Once you’ve identified the limits, codify this information in a playbook so that contract creators in the commercial team are empowered to negotiate terms without legal involvement.
If your colleagues can self-serve contracts from templates, then legal can spend more time on the higher-value work they’re trained to do
A Q&A flow is a great way to enable other teams in the business, allowing them to populate your perfect vendor agreement template with key information by answering simple, natural language questions. And if your colleagues can self-serve contracts from templates, then legal can spend more time on the higher-value work they’re trained to do.
Create an approval workflow
Other teams may be empowered to self-serve, but you will still want legal to have the final say before the contract is sent to the counterparty. Use your contract collaboration platform to create a specific workflow for approvals and set defined roles for approvers and signatories. Triggers will notify the right people of any updates to the contract, and with a full audit trail of negotiations, you have total visibility before a contract is sent for signing.
Now matter how slick and easy-to-use it is, getting teams to adopt a new workflow can be tricky. Make sure that the simple things are easy, such as logging in, and offer plenty of training to help teams build up their confidence on a new platform. It’s important to start small: running a pilot phase will help other teams to get to grips with the process easily, and helps legal stay in control.
Use dashboards and analytics features in your contract collaboration platform to review the workflow. Are there bottlenecks in the process? Are certain clauses regularly negotiated? Are certain stakeholders slowing things down? Make sure your process stays scalable by reviewing regularly and making improvements.
Scale your vendor agreements with Juro
Is your SaaS company or marketplace scaling fast? Is your contract process out of control, with multiple systems and a lack of visibility post-signature? If so, try Juro and see if you can benefit from a contract collaboration platform that enables businesses to agree and manage contracts in a unified workspace.