The terms and conditions of contracts can make or break your margins. They can have a profound impact on the sustainability of your company as well.
That’s why it’s important that your employees understand a contract’s terms and conditions when they work with sub-contractors and customers.
Since most folks’ eyes tend to glaze over when they think of contracts, how do you get everyone to regard this topic with the respect it deserves?
Professional screen capture tools like TechSmith® Snagit® provide a solid platform for learning about the structure of contracts, including terms and conditions. Snagit gets everyone around the table, collaborating.
Let’s face it, unless your expertise is contracts negotiation, reading through a contract is a combination of boiling the ocean and root canal. Depending on your industry, these contracts are lengthy, detailed, specific, and filled with caveats. They have to be.
Many employees assume that all contracts are created using the same verbiage that their own company uses. To the contrary, contract terms and conditions are as variable as the business cases under which they are issued.
Contract Terms and Conditions apply to both general and specific arrangements, provisions, rules, requirements, specifications and standards that form an important part of a contract or agreement between two or more parties. (Online Business Dictionary)
Long story short: Contract Terms and Conditions define assumption of risk and liability. Contract Terms and Conditions define when, how, and whether or not you are going to get paid for a product, project and/or service delivery.
My advice: Each month, have a lunch-and-learn about contracts. Contract review is far more interesting with some food thrown in for motivation!
Here are 6 tips for getting started.
- Use your Snagit screen capture tool to highlight specific areas of contracts, such as intellectual property, non-disclosure, terms of agreement and payment terms.
- Discuss how and where your own company’s contract terms and conditions may vary from your customers’ or your sub-contractors’ terms.
- Discuss how and when you would modify your company contracts.
- Compare and contrast specific sections of these contracts, again using your screen capture tools.
- Emphasize that understanding contract terms and conditions are part of everyone’s job function, even though there is lots of fine print involved.
- Encourage employees to utilize screen capture to highlight areas of contention when working through discrepancies or late payments on contracts with customers and sub-contractors.
Failing to note, and notate, differences in contracts can cost your company money, especially if there are changes made to the scope of work or project specifications. Utilizing screen capture can cut to the chase in the contracts conversation. Highlight the areas you are referring to, rather than doing the usual “page 3, paragraph 5, sentence 6” form of communication.
Make it a team strategy to scrutinize contracts on a regular basis. Your customers and sub-contractors will gain greater respect for your entire team’s business acumen in the process. Everyone –including your customers and sub-contractors – gets a little bit smarter, too.
Babette N. Ten Haken is a management strategist and team-building leadership coach. She helps teams, startups and businesses who wrestle with unpredictable revenue streams. Her Workshops and Playbooks create more productive and profitable teams in healthier organizations. Her Playbook on leadership and business strategies, including tools, Do YOU Mean Business? is available on Amazon.com.
This post is sponsored by TechSmith®. All opinions are my own.