Strong supplier relationships don’t just keep the wheels turning—they deliver measurable returns. According to Spend Matters, “Organizations that invest in building stronger supplier relationships see benefits ranging from cost savings to innovation, operational efficiency, and improved delivery times.” Trust and alignment are essential for these partnerships to thrive, and contracts play a key role in making that happen.

Your contracts hold the keys to strengthening these relationships. They’re not just where terms and obligations live—they’re also where you can uncover opportunities to align goals, create transparency, and set the foundation for long-term success.

Here are 10 ways your procurement contracts can help build better vendor relationships and deliver results for both sides.

1. Spot Unclaimed Incentives

Rebates, volume discounts, or performance-based rewards tied to supplier achievements are often buried in contracts. Highlighting these incentives not only boosts supplier performance but also shows that you value their efforts, fostering a stronger, more collaborative relationship.

2. Clarify Roles and Expectations

Ambiguities in contracts often lead to miscommunication and frustration. When deliverables, timelines, and responsibilities are clearly defined, both parties can work together more smoothly, reducing friction and building trust.

3. Consolidate Agreements for Simplicity

Redundant agreements with the same vendor can create inefficiencies and confusion. Consolidating contracts—such as merging regional IT equipment agreements into one global contract—makes management easier and demonstrates your commitment to streamlining the partnership.

4. Build Trust Through Transparency

Including regular reporting mechanisms or metrics like on-time delivery rates in contracts ensures accountability on both sides. This transparency builds trust by showing vendors you value fair and measurable contributions.

5. Create Flexibility to Adapt to Change

Rigid terms can put unnecessary strain on relationships during market fluctuations. Flexible clauses, such as pricing adjustments tied to commodity costs, allow vendors to adapt without jeopardizing the partnership, ensuring both sides can weather changes together.

6. Align on Long-Term Goals

Contracts that include shared objectives, such as sustainability targets or innovation projects, signal that you see your suppliers as partners in achieving broader goals. This alignment strengthens the relationship by showing mutual investment in long-term success.

7. Surface Hidden Value in Service Agreements

Training, maintenance, and technical support often go underutilized, leaving valuable resources untapped. Using these services not only improves efficiency but also shows vendors you’re fully engaged with what they bring to the table.

8. Define Fair Payment Terms

Vendors perform best when payment terms support their cash flow. Offering options like net-30 terms or early payment discounts (e.g., 2% for payment within 10 days) fosters goodwill and shows you understand their needs, which builds a stronger partnership.

9. Ensure Accountability with Performance Clauses

Service-level agreements (SLAs) with specific benchmarks, like a 98% on-time delivery rate, provide clarity for both parties. When vendors know exactly what’s expected, they’re better positioned to deliver, strengthening their reliability and your trust in them.

10. Reduce Risk with Updated Clauses

Outdated liability or compliance terms can expose both you and your suppliers to unnecessary risks. Updating these clauses to address modern challenges like cybersecurity shows that you’re protecting the partnership and building confidence in its long-term viability.

Contract intelligence uses artificial intelligence (AI) to extract, organize, and analyze contract data, giving you a clear view of your agreements. With this visibility, procurement teams can uncover ways to strengthen vendor relationships by identifying gaps, setting clear expectations, and aligning goals in a way that works for everyone.

Teams using contract intelligence have saved time, improved collaboration, and built stronger partnerships by focusing on what really matters. With the right insights, your contracts can go beyond business as usual and become tools for growth and success for you and your suppliers.

Want to learn more about how contract intelligence helps you build better vendor relationships? Read on.