Happy New Year to all our readers.
You read about 2 processes under “Customer Contract Management” – Tracking renewals & contract abstraction.
Contract drafting is also a very lucrative piece for a back office / outsourcing unit. For customers, most of the contracts are very similar in terms of the content they have, with key differences comprising primarily of the different terms of the contract. The key to a good contract draft is definition of the first draft, which would be existing for most of your client customers. Once a set of contract clauses are finalized, you can re-use the same on an ongoing basis. Usually, this first set will be validated by a legal team, and maybe re-validated once a year by the legal team / attorneys of the client.
A primary set of changes in any contract happens based on the customer’s standing and agreed credit terms. These may be in the shape of:
- Period of validity
- Credit terms / days
- Interest and penalties on delays in payments
- Discounts on early payments
- Minimum off-take agreed to in a span in time, say a week or a month normally
- Contract review period clauses
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