For small and medium-sized enterprises (SMEs), effective contract management is essential for ensuring operational efficiency and legal compliance. Strong contracts lay the groundwork for successful relationships with suppliers and customers, and they protect your business from potential risks. This unlocks the door to profitability whilst at the same time positioning your business on a stable, reliable and insurable platform.
However, many SMEs struggle with managing these contracts and maintaining compliance. By understanding the key processes and seeking legal guidance, you can optimise your procurement contract management for high performance.
‘If you fail to prepare, you prepare to fail, as the old saying goes. Never has this been truer than in contract management and compliance. As an SME owner, you must stay on top of your contracts by managing them, being aware of deadlines, tracking relevant changes in legislation and taking the lead during renewal negotiations,’ says Tom Bodkin, a partner with Borneo Martell Turner Coulston. ‘It can sometimes feel overwhelming for smaller businesses, but with some basic good housekeeping and by seeking the correct legal support, you can set yourself up for business stability and success.’
Tom highlights some of the key considerations when assessing how strong your own SME contract management and compliance is.
Contract management processes
To manage your procurement contracts effectively, start by establishing a clear contract management process. This should involve several steps, including the creation, execution, and monitoring of contracts. Begin with setting up procurement contracts that clearly outline the terms, responsibilities, and expectations of all parties involved. The contracts should always include essential clauses addressing payment terms, delivery schedules, and quality standards.
Once the contracts are in place, monitor their execution and delivery closely. Set up diary alerts for important dates like renewal deadlines or compliance checks.
Contract renewal
Contract renewal is a critical aspect of procurement management. As a contract approaches its expiration or renewal date, it is essential to evaluate its performance and decide whether to renew, renegotiate, or terminate.
If you choose to renew, consider negotiating better terms based on your experience and market conditions.
Compliance checks
Compliance checks are integral to maintaining the integrity of your procurement contracts. Regularly reviewing your contracts ensures that all parties are adhering to the agreed terms and legal requirements. This includes monitoring adherence to regulations regarding employment laws, health and safety regulations, environmental standards, and industry-specific guidelines, together with very serious matters such as anti-bribery and corruption, and anti-modern slavery.
Establish a routine for compliance audits that align with your contract timeline. This not only safeguards your business from legal risks but also fosters a culture of accountability with your suppliers.
How we can help
Our legal experts can guide you through the contract drafting process, ensuring that all essential elements are included and that your interests are protected. They can assist at the renewal stage, advising on key deadlines and processes, together with assistance during all stages of the negotiations.
For an informal conversation on any procurement contract or compliance matter, please contact Tom Bodkin in the corporate and commercial team on 01604 622101 or email
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
