It is not a coincidence that all large suppliers have in place written terms and conditions of sale to govern their customer contracts. Getting to that point of wanting these terms and conditions in place is a journey that often starts when businesses are smaller with a bad experience such as not getting paid.
Changing attitudes to risk
As businesses grow, attitudes to and awareness of risk change and terms and conditions of sale are one of the key tools to help to manage both legal and commercial risk in relation to customer contracts.
Once terms and conditions are in place, a business starts to turn its mind to contracting processes to manage the associated risks and pain points of handling contracting on a daily basis. Many large businesses have in place processes that help them manage the issue and negotiation of terms and conditions so that they are both (i) protected and (ii) manage the volume of sales more efficiently. These systems are often designed with lawyer input.
My day job is so serious, writing silly poetry is a bit of light relief and uses the other side of my brain! At Christmas, I wrote a poem about an elf who found himself having to think about the nuisance of contracts when he just wanted to get on with the job at hand. Sound familiar…?! Behind every verse in this poem is a serious point and a serious amount of experience and pain of myself and others who are involved in those very contracting processes I describe above. Verses one and two of this poem highlight the fact that there are several stakeholders in any such contracting process.
- There are many different stakeholders in the contracting process, the most obvious one is the customer vs supplier. Each has different and often opposing objectives. E.g. the supplier wants to retain intellectual property, the customer would like to own it!
- And within each company, whether customer or supplier, there are a variety of internal stakeholders. The Board and the lawyers are managing risk and provide policies and those on the front line have to live with the realities of contracting policy – e.g. getting things signed.
Let’s spare a thought for the front-line stakeholders!
At the start of any project, the customer delivery team is (quite rightly) excited and focused, and raring to go. They just want to get started and the business of contracts couldn’t be further from their mind.
Rather like the elf in this poem, those on the front line of service delivery can often feel deflated and irritated by the intrusion of contracts and the legal stuff which they see as holding them up. Or, like the shopkeeper, they have to deliver bad news which is entirely outside of their control (and sometimes understanding).
Good process saves pain and improves protection!
The contracting process is just one part of a company’s risk management policy which like other aspects of risk management involve giving the appropriate staff the appropriate toolkits to manage those situations so that there is an acceptance and comfort, and confidence that it does indeed form a part of the day job.
Get it right and it can save a whole load of time, pain, cost, worry, and of course the company is protected. Get it wrong and it will exacerbate the headaches with unintended risks to boot!
If you want to know more or have any questions, then contact Tracey today: firstname.lastname@example.org or call 01202 729444.