4 Best Practices for Critical Vendor Contract Management
Critical vendor contract management best practices.
When dealing with your critical vendors, it's necessary to ensure that all parties know what is expected of them and what the dealbreakers are in the relationship. Learn 4 best practices of critical vendor contract management in this podcast.
You may also be interested in:
Hi - this is Kara with Venminder.
In this podcast, you’ll learn some best practices for managing contracts with critical vendors.
Here at Venminder, our team of qualified industry experts, including paralegals, understand the complexities of what should be included in vendor contracts to engage in relationships without any hidden risks.
When starting a relationship with a new vendor, or when renewing an existing contract, it’s important create detailed contracts that will mitigate risk, establish expectations, and prevent severe damages in case an issue arises with the vendor relationship. Especially when dealing with your critical vendors, it’s necessary to ensure that all parties know what is expected of them and what the dealbreakers are in the relationship.
Here are four best practices to consider for critical vendor contract management
- Ensure that you use clear, legally binding language and structure that includes the necessary requirements for mitigating risk. The contract should be reviewed by legal professionals and formatted to fit your relationship, including other related agreements such as statements of work, service level agreements, and pricing tables.
- Complete due diligence before executing the contract. By completing due diligence prior to executing the contract, you’ll be able to remedy conflict and avoid potential practical and legal issues. Along with performing due diligence on your vendor, be sure to have your vendor provide a list of any fourth parties or subcontractors they utilize and the appropriate associated due diligence documents for them as well.
- Review the contract during vendor performance assessments. Your organization should regularly review the contract and look out for changes in regulation, expiration dates, and any additional pricing discounts or changes that will need to be addressed prior to renewal.
- Make the contract easily accessible for review and reference. The vendor owner and vendor risk managers should be able to access the contract easily. You can store the contract with the vendor record, preferably within the same system. Ensure that there is an alerting system set up to remind you of key dates such as automatic renewals and termination notification periods.
By following these four best practices, you’ll set your expectations for the relationship, ensure that both parties understand their responsibilities, and be able to proceed with the peace of mind that you have effectively created a roadmap for your vendor relationship.
Thank you for tuning in and catch you next time!
Subscribe to our Third Party Thursday Newsletter
Receive weekly third-party risk management news, resources and more to your inbox.