Looking for a source of truth for your startup’s reporting? Struggling to rely on the seemingly random numbers that your sales team save in Hubspot or Salesforce? Contracts are often your best bet for reliable data. After all that is the legal representation of your sale, it should be correct. To get started with using contracts as a source of truth here are our top ten tips for contract data management. Unlike clickbait the last one won’t surprise you but they will give you a good framework of how to think about structuring and using your data.
1. Know What Data Contracts Are Best For
Contracts hold a lot of useful and important information. Your goal before getting started is to map out what is useful now and will will be useful in the future. Your secondary goal is to identify what is not important. A thirty page contract is likely to have ten to fifteen points that are worth tracking, you should know what these are.
Think about what will be pieces of data that help your team at different points. This starts with value, start and end dates as the basics. But also think about billing terms for you finance team, renewal terms for your CX team and everything else that factors into points of your business that will help you keep customers and have them pay faster.
2. Know Which Teams Benefit From Contract Data
Different teams will require different things from your contracts. As we mentioned think about the clauses in your contract that are important to crunch points for each team in your business. Here are some examples:
- Finance – Billing terms
- Marketing – Can we use their logo in marketing?
- Product and Engineering – Can we use anonymized data for product improvement
- Renewals and CX – What are the renewal terms?
3. Surface Contract Data In The Right Places
Knowing what data is important and who it’s for is half of the battle. Surfacing this in the right places for your team is more of a war. Think about where your different teams live every day. Is it Hubspot? Is it Slack? Sharepoint? Teams?
Once you know what data you should be pulling and who you should be pulling it for the next step is using some automation to have this surfaced for the right people at the right place and time.
4. Tips For Contract Data Management: Extract and Structure
The biggest problem with contract data is that it’s stuck in long form PDF contracts. Extracting this with a tool like Contract Sent will help you get this into both a format that is digestible but also something that the entire team can quickly reference.
A lot of this is done with manual work by a junior team member or an intern. It’s not a cost effective or fast way to solve the problem. That’s what Contract Sent has been built for.
Redline What Matters
Raise Changes For Approval To Turnaround Contracts Faster
5. Start Early And Structure For Growth
The problem with B2B sales is that each and every contract needs to be negotiated. Each negotiation is a new variation of a contract and this can build up quickly. Before you know it you’ll have fifty contracts, all with variations and you’ll suddenly need to start tracking these variations.
Getting a structure put in early to track the changes to contracts will stop it getting to this point and will allow you to draw on reliable data early on. Not to mention this will make raising investment a lot easier in the future.
6. Use The Right Tools
Getting the best out of the tools that you use for Contract Data Management is important. Also once you select a tool it’s tough to switch later on. We’ve written a few guides for you to reference:
7. Get Team Buy In
To really get the best out of these tips for contract data management you’ll need to get buy in from your whole team. That’s because you’ll need to work with your entire team to get the information flow right. At the end of the day your legal function is part of the sales motion and the more the team buys into this the more you’ll speed up your sales cycle.
8. Think Beyond Internal Users
As you grow your business you’ll most likely be looking to raise capital. You can tell investors all you want about your great numbers but your contracts will be the ultimate source of truth when due diligence comes along.
If you have your contracts in order and in a structure that’s easy to share with investors you’ll be light years ahead of your competitors.
9. Don’t Let Legal Become A Silo
Legal should never be a silo. But it often is. It shouldn’t be because your legal team is negotiating contracts based on how customers will be using your product and your product is constantly evolving. Your legal team needs to understand the constant evolution of your product as much as everyone else so that these changes are captured in your legal decisions.
10. Build High Level Overviews With Drill Down Ability
If I have to sit through another contract review session I might just cry. These sessions are incredibly boring for someone that isn’t a lawyer and probably boring for lawyers too. But you need to walk through legal decisions together to ensure that you’re not pushing but unnecessarily or giving in on points that you should stand strong on.
Creating contracting communication that allows you to look at contracting decisions on a high level and drill down only where needed is essential to speed this up. Contract Sent does this with contract tasks for approval.