As your company scales, it may send out hundreds of supplier agreements. Can standardization make agreeing and managing them easier?
Supplier agreements are some of the most commonly agreed contracts in a business. This deep dive looks at what a supplier agreement is, who they affect and the benefits of standardizing them. Explore using the navigation below.
What’s a supplier agreement?
Supplier agreements define terms of a commercial relationship between the buyer and the supplier. The contract commits both parties to do business with each other over a specified period of time and may also be referred to as buy-side agreements.
Supplier and vendor agreements are similar contracts, but differ slightly in their language and the relationship between the parties. Vendor agreements tend to define terms for the selling of services, rather than goods, whereas supplier agreements have a broader purpose. In a supplier agreement, the supplier would also usually communicate more with the buyer, with the intention of building and strengthening a commercial relationship that leads to repeat business.
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. Generally, the list includes:
Legal, who are responsible for negotiating and approving legal terms.
Procurement, who negotiate commercial terms between the two parties.
Finance, who authorize spend on the agreement and oversee the payment process.
Contract managers, who are responsible for managing the agreement after it’s been signed. This is often owned by legal or procurement.
A no-code template editor can help by ensuring that contracts are always based on the latest terms, as pre-defined by legal
Why standardize supplier agreements?
Supplier agreements are important for commercial growth; the more closed deals, the greater the revenue for the supplier. It also helps buyers and suppliers allocate resources in a competitive market. The agreement benefits both sides of the relationship.
As the business continues to grow, legal and procurement teams may have numerous supplier agreements to handle at any given time. And if the process behind these contracts is inefficient, managing them can become increasingly challenging.
A consistent contract workflow, with standardized content, can help a business avoid problems before they pile up. It will allow a company to quickly and repeatedly create, send out and agree these important contracts as the business continues to scale.
A no-code template editor will help ensure that contracts are always based on the latest terms, as pre-defined by legal. This keeps variation to a minimum and reduces the risk of teams deviating from set terms because they couldn’t wait for the legal team’s input or approval.
Find out what end-to-end contract collaboration looks like for the modern business: download the ‘Modern contract handbook’.
How to standardize supplier agreements
Start with why
Remember why you want to improve the contract process – to improve the relationship between both parties. An improved, standardized contract process will deliver a better contract experience for the buyer. And a better experience means a positive impression of your business, a stronger buyer/supplier relationship and the possibility for repeat business. A win-win situation for all.
Nail that contract template
Look through previous supplier agreements: which versions of the contract attracted the least negotiation? Are there any clauses that always get pushback? Or do you get the same questions, again and again, about certain sections that are hard to understand? If you can ease up on particular terms and optimize your supplier agreement template for signing, you’ll get to “Yes” much faster.
Lose the legalese and replace with plain language that complements your branding and visuals, and makes the agreement more human
User-centric design can have a huge impact on how time-to-sign. Linking, layering and tables can foreground the contract’s most important information so the counterparty has everything easily to hand. Lose the legalese and replace with plain language that complements your branding and visuals, and makes the agreement more human.
You might need fallback positions for certain agreements. For example, if a supplier agreement is above a certain value then you might be more willing to negotiate. With a contract collaboration platform that uses conditional logic, you can integrate fallback positions within the template itself. This makes it easier to enable other teams to negotiate without legal’s involvement.
The following features are a must-have when it comes to standardizing supplier agreements:
A no-code editor. Tables, graphs, images and GIFs can help you create simple, engaging supplier agreements people actually want to sign, so look for a no-code editor that allows you to include rich content.
Smartfields. Make your key fields – such as renewal deadlines, values, addresses and names – trackable and searchable. Two-way integrations allow you to sync this data with your CRM.
Commenting. A must-have for negotiations. Engage externally with the counterparty and collaborate internally with your colleagues, without ever having to leave the contract (or your browser).
Locked templates. Reduce risk when other teams are leading negotiations by letting legal lock down key terms in the template.
Defined playbooks. Codify alternative clauses and fallback positions in a supplier agreement template using conditional logic.
Visual timelines. These offer total visibility of the contract as it progresses. Approvers and signatories can scroll through versions to keep track of edits and stay in the loop.
Slack. Get notified in Slack when someone makes a change to the contract. These notifications also keep you updated with contract activity, such as the glorious moment the contract has been signed, so you and your team can celebrate together.
Email. These notifications help ensure the contract process doesn’t lose its momentum and give you the option to stay up to date without ever leaving your inbox.
Standardize supplier agreements with Juro
Is standardizing supplier agreements a challenge for your business, with multiple systems pre-signature and a lack of oversight post-signature? If so, try Juro for free and empower your business to self-serve at scale, all in one place.