What is Sell-side Contracts?
Sell-side contracts are legal agreements between two entities for the sale and delivery of goods, services, securities or other personal property. These come attached with a lot of obligations and risks and are vital to companies’ bottom lines.
According to the blog CPO Rising, “75% of all corporate revenues are tied/linked directly to sales contracts.” With such high financial value at stake, there is a huge pressure on Sales teams to acquire new customers, maintain relations with existing customers and turn around deals faster. And along with meeting their sales targets, sales teams also need to actively participate in the contracting process from request intake to contract renewal, which, with manual processes takes up a huge chunk of their precious time.
In spite of the significance of sell-side contracts, companies are still reluctant to invest in contract management systems to automate and streamline sell-side contracting processes. Companies fail to realize that there is as much scope for ROI on the sell-side as on the buy-side and hence often deploy contract management solutions for buy-side contracts alone. IACCM benchmarking data shows that medium-to-complex sell-side contracts typically utilize more than 76% of contracting resources.
For half of these contracts, the average cycle time from bid to execution can extend up to a whopping 21 weeks. These figures reveal the current sorry state of sell-side contract management. With companies having to invest so many resources and yet contract-cycle needing more than a quarter to complete, there is clearly an urgent need for process streamlining and automation in sell-side contract processes.
How does an advanced contract management solution help?
According to a Salesforce survey report, high-performing sales teams use nearly 3 times as much sales technology than underperforming teams. To unlock the full value of your sell-side contracts, your contract management systems should be capable of simplifying tasks for the sales teams by streamlining and standardizing contracting processes and integrating CRM systems with CLM platforms. An ideal CLM solution for sell-side contract management will include the following:
1. Request Intake
Once a deal is won, begins the complicated, time-consuming contracting process, starting with putting in a request for new contract. This process involves sales operations drafting a contract from scratch, finding the right approver, sending documents over email and then waiting a long time for approvals.
Contract management integrates CRM systems with the contract management platform. This enables the sales teams to request for a contract right from their everyday sales platform by just filling in a few key details in a form. The CLM populates the right template with all the contract information and sends it to the right approver who gets alerted of the same and can respond at once.
A smart clause library ensures all necessary clauses are covered depending on the contract type. This reduces the time from request intake to best first draft from a couple of weeks to just a couple of days and ensures standard contracting language and process streamlining.
2. Negotiations and Approvals
Sales teams often act as a liaison between the customer and the legal department in the negotiation stage. With an integrated CLM system for Sales, all the collaboration between different stakeholders can be coordinated on the same platform.
CLM saves all conversations and enables quick response times and real-time conversations between sales and other parties involved. Also, any amendments made by Sales teams are auto-routed to the legal department for review. This reduces the time taken for constant back and forth of queries and documents during the negotiation and approval stage.
3. Visibility, Tracking, and Updates
Post-award contract management, Sales teams are responsible to manage, review and renew contracts. CRM integrated contract management gives Sales teams access to all contract related documents within the CRM system. Moreover, the team has a view of all key information, upcoming deadlines and renewals with auto-triggers to alert them in advance. This gives the teams enough time to renegotiate and renew contracts before the deadline approaches.
4. Compliance Management
Throughout contract lifecycle, right from the drafting phase to post sign-off, contracts need to be continuously evaluated for ensuring maximum compliance. Even a small error during drafting could expose the organization to huge unforeseen risks. As, with sell-side contracts, sales teams are involved in drafting, amending and negotiating contracts, they need to be vary of non-compliance due to negligence or omissions.
CLM solutions come in-built with smart clause libraries that suggest the least risky clauses and ensure companies are fully compliant. Pre-configured milestones and triggers ensure contracts are performing as per commercial and operational clauses and alert all stakeholders in case of non-compliance on all fronts. This gives sales teams the power to address all risks and compliance issues immediately and safeguard organizations from any financial or reputational losses.
Thus, to realize maximum value from sell-side contracts, minimize risks and augment cost savings, investing in an integrated contract management software is the answer. With this implementation, sales teams will finally be able to concentrate their energies on the most important element of their jobs – generating more revenue, faster!