The thing with bad contracts is that first off you should try and avoid signing them. That’s for one and should be quite obvious.

However, how do you assess a contract and whether it’s bad for business or not. Some are easy to detect and negotiate, but some may seem like reasonable demands at the beginning.  Continue reading →

If you have managed to get a clause of having the right to return the goods to the supplier at the end of the period and having to pay only for those you actually sold, there are a couple of things you might want to consider.

For starters, there is no need to have those goods piled up on inventory taking. It’s best to have them being counted and shipped off to the suppliers well before the stock take date to ensure you have as less to count as possible.

You always need to make sure those goods are either kept separately in stock, labeled uniquely or otherwise there are means to separate them from other supplier goods. You don’t want them to get all mixed up with goods you have no right to return.
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When negotiating agreements with suppliers, you usually argue over prices, payment terms, delivery conditions etc. What we have seen being ignored however, are the return rights. When we say “return rights”, we don’t mean situations where the goods have been damaged or are simply malfunctioning. This is something that should come as a default right.

It’s always handy to include into the agreement however the right to return the goods in a specified timeframe regardless of the reason. Yes, it requires negotiation with the supplier and as such may definitely not be easy. However, it’s worth having it in there as you may never know if the goods satisfy your needs, is enough etc. Why not get it in there?
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Although you have ensured all your contracts are safely stored and only authorized personnel has access to them, you still may struggle with finding the right contract fast enough. And in addition it may be hard to keep track on all contracts in place, still effective, already terminated etc.

The thing that helps you with this is a contracts ledger or listing. Either way you want to call it, the idea stays the same. Essentially it’s a ledger which holds all relevant information about all contracts agreed by the company.

To ensure this listing works though, the very first thing you need to do, is number all your agreements in a manner they are easily identifiable, you are able to sort them by types (i.e. keeping supplier contracts with one similar coding and employer contracts under different referencing) and obviously find them from the very listing itself.

Essentially you can put whatever information you find useful to the list, however the things which usually are registered are as follows:
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When you sign off a contract you want to make sure it is safely put away. We doubt that you will leave it lying around somewhere for any third parties able to access it or even steal or copy it without any approval.

As a general rule and common practice all contracts are safely stored in a deemed location – either a safe or other similar locked container where only authorized personnel has access to. This access should always be monitored in a way to ensure only those with everyday and job description based need have access to them. For an example, the purchase manager should have access to supplier contracts whereas employee contracts should be accessible by human resources apartment and none other.
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