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What is contract management?



What is contract management?

Most startup companies don’t discuss contract management much, especially until they grow larger and have more contracts in the pipeline. People are often surprised when we explain how it affects various aspects of their business: sales, legal, finance, and customer service. It can slow down, inconvenience, or cause mistakes in each part of your business. Many businesses wait until issues caused by poor contract management become significant enough to force a change. However, taking a holistic view of your business reveals that early-stage issues, stemming from numerous small factors, can eventually halt your business.

Understanding What is Contract Management

Contract management covers the entire contract lifecycle—from initiation and creation to negotiation, execution, billing, renewal, and analysis. It involves systematically handling contracts to ensure they align with business objectives, comply with legal standards, and contribute to operational efficiency. It also affects simple business functions, such as ensuring timely payment.

For startups in the tech sector, where sales funnel, cycle, and time to cash are crucial, effective contract management accelerates the journey from initial customer contact to cash. It’s not just about drafting and signing agreements; it’s a holistic approach to optimizing the entire process, addressing unique pain points of B2B startups negotiating contracts.

The Challenges Tech Startups Face in Contract Management

1. Extended Sales Cycles:

  • Challenge: Prolonged contract negotiations impacting sales cycles. The slower your sales cycle the slower your growth
  • Contract Management’s Role: Understanding contract management and its nuances helps grasp its role in the sales cycle. Effective contract management ensures legal involvement at the right time, presents appropriate templates to customers, and accelerates the sales cycle.

2. Legal Team Management:

  • Challenge: Ensuring legal teams work efficiently, especially during critical deadlines.
  • The role of contract management: Effective contract management directs your legal team to prioritize tasks correctly, aiding in achieving end-of-quarter goals.

3. Senior Leaders’ Oversight:

  • Challenge: Lack of senior leaders’ overview on negotiation progress means that the wrong thing is agreed to or the wrong thing is being worked on.
  • Contract Management’s Role: Implementing contract management provides senior leaders with pertinent information when needed. This will save their time working through long form contracts.

4. Reviewing Contract Redlines:

  • Challenge: Senior leaders spending time reviewing contract details.
  • Contract Management’s Role: A well versed lawyer or legal team will know how to set out legal contract comparisons in a way that doesn’t waste the time of senior leaders.

5. Post-Contract Accessibility:

  • Challenge: Information trapped in lengthy PDFs and disorganized folders.
  • Contract Management: Extracting information from contracts and presenting it in accessible formats significantly simplifies tasks for your finance team in billing and for your customer-facing team in renewals.
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Set Tasks, Negotiate Faster

Contract Sent: What is Contract Management for Startups

We’ve developed a tool to streamline all these small issues and reduce much of the manual work in your business. Let’s explore some of the features we’ve built to enhance collaboration and efficiency within your team.

1. Dashboard for Contract Overview:

What our users really need is real-time insights and transparency into negotiations. What is going on and who should I talk to about it?

We’ve build our dashboard to accelerates the negotiation process and provide a centralized overview for efficient decision-making.

2. Easy Access to Contract Metrics:

At the end of the day your contracts are one of your most reliable forms of data. To stay informed for decision-making, you must know the essential metrics in your sales contracts as your team negotiates them. By quickly getting an overview of this in Contract Sent, you can better manage your team’s resources and negotiation processes and understand what works and what doesn’t.

3. Kanban Board for Workflow Management:

When it comes to managing workflows with multiple people involved Kanban is a great method for streamlined workflows that minimize bottlenecks. Using this method of work management ensures a smooth and organized contract management process, optimizing efficiency.

4. Version Tracking and Advanced Contract Comparison:

When was the last time you got lost in the numourous different versions of a contract that was being negotiated? We’ve build in super simple to understand version tracking and advanced contract comparison to mitigate ambiguity, accelerate the approval process, and ensure quick turnaround for sales all through your contract management process.

5. Tracking Important Contract Clauses:

Not all contract clauses are the same. Sometimes it’s fine not to review every small change and knowing how to prioritizing crucial clauses for getting a deal over the line is a juggling act of know what is good for the business and what is low risk. Using a tool like our contract comparison tool will help you to have focused negotiations, ensuring that key clauses are given priority in your review.

6. Task Management for Legal Team Efficiency:

Being able to address workload challenges and ensuring prioritization for startups is one of the most important things your can do. Startups are always under staffed and using tools like our built in contract management tasks will help your team work efficiency, especially during critical periods.

7. Unlimited Users and Startup Pricing:

Startups have a problem that contract management causes a lot of headaches but it’s not somewhere that you can justify spending $10k. So we’ve created Contract Sent with startup pricing that is budget-friendly.

Building a startup can be a mess. There is a lot of things that will get in the way and slow you down. By strategically addressing the challenges faced by startups, Contract Sent transforms the way contracts are negotiated, executed, and managed. It works to pull together multiple members of your team to cut out a lot of your admin work.

But contract management is not a mere administrative task. it’s a strategic tool to make sure your sales cycle is running like a well oiled machine and that you’re fuelling the growth and success of your startup. With Contract Sent, startups can navigate the complexities and back and forth with confidence, speeding up your B2B software sales pipeline.

Contract Sent is not a law firm, this post and subsequent pages on this website do not constitute or contain legal advice. To understand whether or not the ideas and guidance on the Contract Sent website is applicable to your business, you should consult with a licensed attorney. The use and accessing of any resources contained within the Contract Sent site do not create an attorney-client relationship between the user and Contract Sent.

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