As the main revenue center for companies, the Sales department deals every day with a series of contracts: from those in negotiation with potential customers, to those under analysis to identify new transaction opportunities.
But the value these contracts generate for the company goes beyond the figures negotiated. The good management of these documents directly affects the success of operations as a whole.
In today's text you will understand the main risks generated by an inefficient management of contracts in the sell-side, and how Contract Lifecycle Management - CLM software can improve your company's operations.
Creating problems: the effects of inefficient contract management
Although it might not be the manager's intention, an inefficient administration of contracts signed by the Sales department creates a series of problems for almost all areas of the company. The first of them hits close to home: makes the art of selling considerably more difficult.
The Sales team needs to establish a relationship of trust and proximity with the customer throughout the negotiations. The success of this link is directly related to the efficiency of communications.
It is very common, however, that the means and platforms used to exchange information do not have all the necessary functionalities to ensure this efficiency. As a result, some of the following situations end up happening frequently:
- Communication failure: In the exchange of emails to negotiate the contract, the seller accidentally fails to include one of the main parties involved in the approval of the agreement. It will be necessary to resume communications from that point, demanding more time and wearing out those involved;
- No recording of information: In phone conversations, the customer gives the salesperson important details about their expectations, but they don’t record these details anywhere (or they make notes in places where they can easily get lost). The client feels that he always has to repeat himself, or he has the impression that the counterpart is disorganized;
- Failure to register alterations to the document: The seller alters the contract text without highlighting it, and the customer does not notice the change. When this situation is identified, it can give the impression that the company was not loyal during the negotiations.
And yet, for a sale to be completed, it is often necessary to engage other areas of the company. In general, the Legal department is one very requested department in this flow. Inefficiencies in this interaction can create friction between these two sectors and harm the quality of work within the company, with problems such as the following:
- Lack of visibility: When the commercial aspects of the transaction are defined, the contract is sent for review by the Legal department, usually by email. There is, however, no visibility on the review process until a response is received;
- Pressure for review: Without visibility, with the client pressing for an answer on one side and deadlines approaching on the other, the salesperson needs to individually seek the lawyer to know what stage of the analysis the document is at.
- Additional work: Lawyers receive these requests through all channels imaginable and are overwhelmed not only with the analysis of the document itself, but also with these communication demands.
- Lack of certainty as to the content of documents: The analysis itself becomes time-consuming because lawyers review each clause individually to ensure that they are all complete and updated.
Scenarios like this are part of everyday life for many companies, but they invariably undermine customer trust and generate friction between departments.
Finding Solutions: the Advantages of Good CLM Software
Efficient contract management generates greater visibility to negotiate agreements and ensures the information's reliability, enabling the extraction of intelligence from documents that were not previously monitored in such detail. All these points favor the relationship with the customer and the interaction between the company's areas.
When interacting with the customer, a CLM software such as netLex generates several advantages. Among them are the following:
- Customer relationship: Inclusion of the customer in the negotiation, review and signature flow of the document, centralizing communication in an intuitive and easy-to-use platform;
- More visibility and efficient archiving: keep a full record of all communications made within the platform, with broad visibility to those in charge of negotiation and fulfillment of that contract.
In the articulation between the company's departments, a CLM software such as netLex unlocks the potential of both the Sales and Legal departments.
- Autonomy to negotiate: the Sales department is able to prepare contracts by simply filling in the questionnaire, which gives autonomy and speed to negotiations;
- Legal certainty: corporate lawyers do not need to fully check documents, as they are sure that all relevant clauses have been included in the template. This makes revisions faster and more efficient;
- Broad visibility: the Sales department can identify which stage of the review the document is in, what is the deadline and who is responsible. This eliminates the additional work of seeking out the necessary information from the attorney.
Once the contract is signed, the management of the agreed obligations can be fully carried out in the platform through a simplified dashboard, including alerts on relevant terms and conditions. This makes it simpler to ensure that everything that was agreed at the negotiation stage will be carried out in the way that the parties wished.
The CLM system can also become a reliable database, as commercial contracts set other departments in the company in motion. For example:
- Finance: can extract payment data to fill in balance sheets;
- Product: identifies which products or services are contracted and organizes itself to produce or provide them under the agreed conditions;
- Human Resources: can gather information on productivity and achievement of goals;
- Marketing: has visibility regarding authorizations for the use of images and other relevant information;
In addition to supporting the activities of other areas of the organization, the intelligence generated on each stage of the contract’s life cycle can offer important insights for the management of teams and procedures as a whole.
Upgrading your Sales team with a CLM software
The contracts negotiated by the Sales department are very relevant to the company as a whole. The obvious side of this statement leads us to the fact that, if the company does not sell, it will hardly remain in the market.
wever, these contracts also have a systemic impact on the corporation's activities, channeling interaction between departments, and influencing almost all of its activities. Thus, it is essential to create solutions, not problems, for the management of these documents.
netLex is a company specialized in document automation and management. In it’s CLM platform it is possible to program intelligent workflows to provide precision and quality to company documents.
Would you like to bring forth solutions to upgrade your Sales department? Talk to our experts now!