DO THIS
Know your company’s procurement and purchasing processes.
NOT THAT
Assume that these processes are not relevant to the contract review process.
WHY
Purchase management must be a shared responsibility. Everyone involved in the process of buying and selling goods and services have a role to play in company decisions in this area because those decisions can impact the bottom line.
When you know your company’s processes thoroughly you will be in the best position possible to ensure that the contracts you are drafting, reviewing, and/or negotiating will meet the needs of your company.
Know if your company has payment terms rules. (How many days does it take to process a vendor payment?)
If your company has “net 30” day rule for payment, but the vendor contract has “net 10” day rule for payment along with a penalty for failure to make timely payments, you company may very well be incurring unnecessary late fees by paying invoices on a 30 day cycle.
If you ask the vendor to revise the contract to include a net 30 day, there will be no issue!
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