How can simplifying supplier agreements reduce time-to-sign, minimize friction and improve the buyer/supplier relationship?
This deep dive looks at what a supplier agreement is, who the process affects and why businesses decide to simplify it. Explore using the navigation below.
We follow a general rule whereby supplier agreements are used for the selling of goods rather than services. Not what you’re looking for? Why not take a look at our deep dives on SaaS agreements and vendor agreements.
What’s a supplier agreement? | Who do they affect? | Why simplify supplier agreements? | How to simplify your supplier agreement process | How to simplify your supplier agreement content | Useful features | Learn more
What’s a supplier agreement?
Supplier agreements outline the terms of a commercial relationship between buyer and supplier, and are also referred to as buy-side agreements. They’re similar to vendor agreements, but with slight differences in language and the relationship between parties. Vendor agreements usually define terms for the selling of services (rather than goods), whereas supplier agreements have a wider purpose.
Who do supplier agreements affect?
The teams affected by supplier agreements depend on the business, the supplies being bought and the value of the contract but generally include:
Procurement, who own the purchasing process and negotiate terms between the two parties.
Legal, who are responsible for negotiations with the counterparty’s legal team.
Finance, usually led by the CFO, who authorize spend on the agreement.
Contract managers, who can be teams or individuals responsible for managing the agreement post-signature and keeping track of renewals. Usually, this is owned by legal or procurement.
Find out what end-to-end contract collaboration looks like for the modern business: download the ‘Modern contract handbook’.
Why simplify supplier agreements?
Supplier agreements power commercial growth. Some of the most successful companies accelerate their revenue by improving their engagement with buyers. And when it comes to contracts, a positive user experience can lead to repeat business and help you strengthen commercial relationships.
In a manual workflow, the unstructured nature of these contracts means they aren’t searchable, making it hard for legal teams to keep sight of important information like renewal dates
Often, the more valuable these relationships, the longer, denser and more complex the supplier agreements used to define them are, both in content and process. This introduces friction, which can have serious consequences – particularly in venture-backed scaleups working to meet aggressive growth targets. Companies looking to simplify their supplier agreements usually experience issues in both the pre- and post-signature stages:
Pre-signature, manual contract workflows involve jumping between several systems: from editing a template Word, to negotiating with the counterparty through lengthy email chains, discussing internally with colleagues in Slack, signing using eSignature… the list goes on.
Post-signature, filing and managing these contracts can be time-consuming. Without a contracts platform in place, legal are often responsible for document tracking. Supplier agreements are saved as PDFs, either in a shared drive or on someone’s personal desktop - or worse, printed and stored in a filing cabinet, never to be seen again. The unstructured nature of these contracts, the data within them and how they’re stored means these agreements aren’t searchable. Legal teams may struggle to keep sight of important information like renewal dates and often get the blame when, for example, a contract auto-renews and the business incurs unwanted costs.
How to simplify your supplier agreement process
Agree and manage contracts in a unified workspace
Most businesses strive to simplify the supplier agreement process by minimizing the back-and-forth process between different systems. Enter: your contract collaboration platform. Managing the contract lifecycle in a unified workspace can improve your efficiency and save chunks of time – and it’s hard to overestimate the benefits of being able to dedicate time to high-value work!
A searchable repository
Creating searchable contracts from structured data requires a platform with a native editor. AI contract review tools can help you read old contracts and integrate them within your platform, but nothing beats dynamic, machine-readable documents that you can create, manage and track in that platform. Now, with a searchable repository, all your supplier agreements are in one place and you can find what you need in a few clicks.
The opportunity to build a new commercial relationship is exciting – don’t be afraid to show that excitement in your supplier agreements
How to simplify your supplier agreement content
This is really about legal design thinking and prioritizing the end user: will they have a positive experience with your contracts? Are your agreements well-designed, engaging and simple? Do they make people want to sign sooner rather than later?
Here are some quick ways to make your supplier agreements friendlier:
Brand it. Charts, tables, images, and even GIFs can make your documents more engaging. The opportunity to build a new (or build on an existing) commercial relationship is exciting – don’t be afraid to show that excitement in your supplier agreements! Include the logos of both companies at the top of the document to help visualize the relationship and personalize the experience to the end user.
Use layering and linking. You don’t need to cram your agreement with every single relevant policy. Find a contract platform that allows you to attach documents or add links to text to keep your agreement is clear, concise and clutter-free.
Foreground key terms. There’s no point using jargon-heavy clauses to hide the important information – you’ll only alienate your counterparty. To close the deal faster, lose the legalese, identify the most important terms and put them front and centre.
The following features are useful when it comes to simplifying your supplier agreements:
A no-code editor. Create simple, engaging supplier agreements people want to sign.
Commenting. A must-have for negotiations. Engage externally with the counterparty and collaborate internally with your colleagues, without ever having to leave the contract.
Device-optimized eSignature. Sign agreements anywhere, at any time, from any device with a native, secure eSignature tool.
Searchable repository. Keep all your agreements in a unified workspace, and search and filter quickly with a contracts platform built on structured data. Post-signature management never felt easier.
Simplified, supercharged contracts
Is simplifying supplier agreements a challenge for your business, with multiple systems involved pre-signature and a lack of visibility post-signature? If so, try Juro for free and empower your business to self-serve at scale, all in one place.