Your Guide to a Flawless Sales Contract Management Process

The process of completing and settling all components of a contract is the mainstay of hitting sales targets. When sales contracts are signed more quickly, sales cycles become shorter, and sales teams have more time to focus on bigger, better deals. It helps organizations reach all their revenue goals more quickly.

Simply put, the effectiveness of the process for managing sales contracts impacts the functions and workflow of your company. In this article, we will provide insights into what you need to implement to improve your company handles sales contracts.

What is a sales contract?

Much like all other business agreements, a sales contract lays out all the terms of a business transaction between the buyer and the seller. It also elucidates any legal obligations that may stem due to the relationship.

However, unlike regular contracts, a sales contract has a narrower scope in that it only ensures a customer gets the product or service on the agreed-upon terms and that the customer has paid for the product or service in full.

Check these to understand what you can expect to see in a standard sales contract:

• A detailed product or service description
• Payment terms (price, payment schedules, and acceptable payment methods)
• A brief explanation of the product or service delivery process
• Warranties and indemnities
• Inspection or “due diligence” contingency

But, this is not all included in a typical sales agreement. The terms and conditions of a software license will be very different from those of a real estate lease agreement.

A SaaS contract, for instance, may have additional provisions such as:

• User access rights
• Penalties for abuse
• Customer service and support
• Data Ownership
• Data security and backup
• Subscription plan
• Auto-renewal 

Who is responsible for sales contracts?

In a business with a manual contract workflow, the legal department looks into drafting and managing sales contracts. The sales team only provides minimal input to achieve the desired business goal.

While this may work just fine for firms closing a limited number of deals each month, it can cause delays and inefficiency when your company begins to generate, negotiate, and sign more sales contracts.

Because of this, more and more companies are using automated contract management to get rid of manual, repetitive tasks and make contract workflows more efficient. And why not?

Using a contract management software like Contractbook does a lot more than take pressure off the already overworked legal team. It allows all contracting teams (sales, procurement, finance, etc.) and other stakeholders to self-serve on pre-sale legal documents and sale contracts. 

3 Steps to a Flawless Sales Contract Management Process

#1: Automate workflows.

The first step in making a good system for managing sales contracts is to automate workflows and cut down on the amount of help required from in-house legal. This usually involves three things:

• Standardized contract templates: Using templates can speed up the creation of most sales contracts. This gives sales reps more freedom to do their jobs without as much supervision from legal.
• Contract-related negotiations: It’s important for sales teams to have some autonomy in contract negotiations before bringing in legal counsel. When parties to a contract negotiate changes, legal departments can check and prepare possible fallback positions for sales reps to use.
• Document routing and approval workflow: Features like online contract routing, automated reminder alerts, and electronic signatures help sales teams to secure approvals faster. They don’t have to chase people to sign and approve a document – something very time-consuming and frustrating!

 #2: Integrate CLM with your CRM.

It is not enough to merely automate the sales contract process. The sales team must also get real-time visibility into the status of all ongoing and completed contracts.

And the most efficient way to do that is to integrate it with their customer relationship management (CRM) software. 

Salesforce and Hubspot are widely used CRMs for sales cycle management. Like IT teams, legal departments also use contract lifecycle management (CLM) software to automate the contract workflow.

Cross-functional collaboration becomes so much more difficult if these two systems aren’t fully integrated. For this reason, it’s imperative that your CLM is fully compatible with the CRM your sales team uses. Because if it is, they’ll be able to: 

• Create, share, and sign contracts within minutes.
• Stay on top of all the steps involved in a sales cycle.
• Identify and fix problem areas in the contracting process. 
• Concentrate more on handling objections and increasing the number of deals closed. 

 #3: Monitor sales KPIs. 

An ideal contract management software provides a dashboard with metrics and KPIs such as:

• Monthly contract closures broke down by type of contract and whether or not a template was used to make it;
• Average time spent on contract drafting, legal review, and other processes;
• Average time spent in negotiations as a function of contract type; and
• Heavily negotiated terms with specific turnaround times.

Conclusion

In short, efficient sales contract management streamlines and automates tedious contract-related tasks integrates with your existing tools seamlessly, and provides actionable BI insights to further refine the process and reduce roadblocks.