Importance of obligation management
Post contract execution, one of the critical aspects of contract management is obligation management. Contractual obligations are duties that each party is responsible for in a contract. Once a contract becomes active, the agreed parties are legally bound to fulfill their dedicated obligations to ensure compliance.
Though contract terms remain explicit, organizations often overlook obligations when manually managing contracts. Unfulfilled obligations and missed deadlines result in contract breaches putting a business at substantial risk. From an impact viewpoint, unfulfilled obligations translate into:
Contextual obligation management in Zoho Contracts
The contextual obligation module streamlines obligation management and helps you manage contractual obligations effectively. It also enables businesses to avoid oversights, improve compliance, mitigate business risks, and enhance performance.
- Add Obligations
- Fulfill Obligations
- Track & Manage Obligations
Track & Manage Obligations
Types of obligation
Contract obligations come in different forms depending on a contract’s subject matter, and they vary from contract to contract. In Zoho Contracts, contract owners add obligations as Task and Non-task obligations based on their nature. Besides adding obligations, contract owners can edit, duplicate, or delete an obligation.
Obligations that are action items are called task obligations—for example, payment and delivery. Based on the number of times they occur, task obligations are further classified as one-time and recurring obligations.
These task obligations occur only once—for example, one-time payment in exchange for a certain amount of goods or services.
These obligations keep recurring at regular intervals of time. For example, periodic quality checks for products/services can be added as recurring obligations. Contract owners can add these obligations by specifying their starting date, ending condition, and recurring period. Also, they can pause or end a recurring obligation anytime before its due date and view its due history.
Besides actionable obligations, a contract can also contain non-actionable promises that the involved parties are obliged to. For example, in a Non-Disclosure Agreement (NDA), the parties involved remain obliged to hold the information concerning the agreement in confidence. This confidentiality obligation can also be added and tracked as a Non-task obligation.
Prioritize your obligations
While adding required obligation details, Zoho Contracts enables the contract owner to prioritize the obligation as high, medium, or low and assign an owner to the obligation. Prioritizing obligations helps obligation owners sort, plan, and fulfill them in due time; it also ensures no high-risk obligations are missed. This ability to enclose all necessary details for every obligation aids in setting clear expectations.
Track obligation progress
When performing an obligation, the obligation owner can update its status as In Progress or Completed using the status field in the obligation details panel. While obligation owners progress with their assigned obligations, contract owners can keep close track of the actions performed from within the related contract. If necessary, the contract owner can reassign an unfulfilled obligation to a different member from the existing obligation owner.
Promote cross- functional
When assigning obligations, a contract owner can choose a peer member from any business function such as sales, support, or finance to fulfill the obligations. Zoho Contracts encourages these cross-functional collaborations by providing lite user licenses. These licenses are for users who do not need the entire feature set of Zoho Contracts but only need to approve or reject a contract, collaborate in a contract, or fulfill the contractual obligations. The lite user licenses are priced at a lower cost than the typical user licenses.
alerts and reminders
When a contract owner assigns an obligation to a member, they receive in-app and email notifications. The obligation owner can directly notify the contract owner if it needs their attention. Contract owners can also send instant reminders to obligation owners based on the obligation status. With a monthly calendar that lists all scheduled and overdue obligations, Zoho Contracts helps obligation owners plan their months better, receive automated alerts before due dates, and avoid missed deadlines.
Drive insights with analytics
With the advanced analytical capabilities in Zoho Contracts, admins can stay on top of the real-time progress of the contractual obligations across all contracts. The deep insights gained from obligation-based reports help businesses revisit their strategies and achieve seamless obligation management.