Many people use the terms contract management and contract administration interchangeably, but they represent different phases in contracting. Here are the differences between the two and what you can expect at each stage of the process.

Contract Administration: What Is It?

Contract administration involves the planning and execution of the written agreement. Planning often involves sourcing contracting partners through sending requests for proposals. Entering a mutually advantageous and legal contract is essential to any business’ financial success, so a company must find the best partners possible.

Preparing a Contract Administration Plan

When you create and follow a strong administration plan, you will be in an excellent position to manage new contracts throughout an agreement’s life cycle. Documents like these should detail expectations as well as the consequences of not fulfilling contractual obligations. Here are typical steps to contract administration planning.

1. Defining the Scope and Deliverables

A successful contracting process needs a clear definition of expectations and deliverables. Scope creep can derail a contract, so getting clear on the coverage will keep things on track. Also, contract plans should have a detailed timeline containing milestones like the project start and project end dates, deadlines for deliverables, and required progress updates, among others.

2. Understanding the Financial Terms

To avoid contract disputes and maintain positive relationships between both parties, everyone involved in the contract administration process should know the financial terms of the agreement. Parties involved should be aware of the value of the contract, payment intervals, and the process to address the need for any additional expenses (depending on the type of contract).

3. Planning and Risk Management

The plan needs details on executing contract deliverables. It should talk about the people working on each part—both in-house and third-party, if applicable—and provide a way of measuring success. 

Having metrics means you can objectively measure outcomes and can implement course correction. Plans also need some flexibility for budgets and timelines. It is necessary to account for some risk, minor delays, or unexpected events.

Contract Management: What Is It?

After the parties execute a contract, they move to contract management. This phase involves ensuring adherence to the terms and conditions of the contract. In the contract management phase, some circumstances could change, which means modifications to the original agreement. 

What Happens during Contract Management?

Generally speaking, there are seven crucial stages in the contract management process. Knowing all of them increases your chances of meeting requirements and delivering the best results.

1. Planning

During this stage, both parties should work on the details of contract management. Both sides must talk about pain points, needs, and goals. They also have to consider the resources they have and decide on a system that would help them facilitate the management process.

2. Implementation

After planning for contract management, you can start implementing. If you have several contracts to manage, you need legal document management tools like specialized software to help you handle the different timelines and checklists the contracts will have.

The implementation phase is also the time to onboard and train everyone involved in the contract management process. People should be up to speed with using your contract management software to minimize delays later on.

3. Pre-contract

In the pre-contract stage, both parties have to align and iron out the details of the agreement. They must discuss specific guidelines for managing deliverables.

4. Handover

The handover stage is crucial if the ones who negotiated the agreement won’t execute and deliver on the terms. Both sides need dedicated meetings to ensure understanding of roles, responsibilities, and deliverables.

5. Contract Stage

This stage is when the relevant parties execute and complete deliverables. They must do so according to the timeline and budget specified. Contract management software will be beneficial at this stage, especially in keeping the project on track and measuring performance.

6. Pre-renewal

When the contract winds down, both parties will have to determine if they want to renew, renegotiate, or terminate. The timelines for these actions are rather slim, so it is in both party’s best interest to start reviewing the contract as the end date draws near.

7. Post-contract

After the contract ends, the parties confirm that both parties met the conditions specified. Conducting a post-mortem will help uncover successes and shortcomings that can help make future agreements better.


Administering and managing contracts are vital to business agreements. Knowing the nuances of each will help managers perform both tasks well. Using contract management software will also streamline the processes and keep all parties efficient.

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