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What Is Contract Management – A Guide For Tech Companies

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what is contract management

As your tech startup scales, the complexity of managing contracts intensifies. The constant refrain of “check the contract for that” can become a significant bottleneck, consuming valuable time and resources. Contract management tools become indispensable, offering a strategic solution to streamline processes and enhance scalability. In this guide, we explore common tools used for contract management, their advantages, and how a deal desk function can revolutionize your approach to managing contracts.

Scaling Up: When Contracts Multiply, Efficiency Matters

Reaching the point where your startup is handling ten or twenty customers is a commendable achievement, but it also introduces challenges. The need for effective contract management becomes paramount. To navigate this terrain successfully, understanding the core principles and tools of contract management is essential.

Tools for Scaling Contract Management

Contract Storage Tools:

The first hurdle in scaling contract management is organizing and storing contracts efficiently. While a simple folder system might suffice in the early stages, as your customer base grows, so does the complexity. Dedicated contract storage tools become essential:

  1. Google Drive: An intuitive cloud-based solution that facilitates collaboration, version control, and secure storage.
  2. Sharepoint: Ideal for larger enterprises, providing a robust platform for document management, collaboration, and version tracking.
Contract Management Software:

Transitioning from generic tools to specialized software is a pivotal step in enhancing efficiency. Here are some game-changing platforms:

  1. Trello: A visual collaboration tool that adapts seamlessly to contract management processes, offering a Kanban-style approach to task management.
  2. Planner Board: An intuitive tool for organizing tasks and milestones, enhancing team collaboration during contract negotiations.
  3. Contract Sent: Tailored specifically for tech startups, Contract Sent combines a comprehensive dashboard, Kanban board, version tracking, and advanced contract comparison tools.
Contract Negotiation Tools:

Navigating the negotiation phase requires tools that facilitate seamless communication and progress tracking:

  1. Trello: Beyond task management, Trello can serve as a negotiation board, tracking discussions and ensuring clarity in communication.
  2. Planner Board: With its visual representation of tasks, Planner Board aids in monitoring negotiation progress.
Contract Tracking Tools:

Once contracts are in place, efficient tracking becomes imperative:

  1. Spreadsheets: A classic tool for tracking important contract details, ensuring visibility into crucial milestones and obligations.
  2. MRR Waterfall: A financial tracking tool that aligns with revenue goals.
  3. Contract Sent: With its dedicated tracking dashboard, Contract Sent provides real-time insights into the progress of negotiations.
manage contract negotiations
Set Tasks, Negotiate Faster

The Role of a Deal Desk Function

A deal desk function acts as the transition piece between your sales team and the rest of you business for managing contracts effectively. It serves as a centralized hub where all stakeholders, from legal teams to sales leaders, can collaborate, pull together all of the hard work that the sales team has done to then feed into the rest of the business in a way that can be used efficiently.

A deal desk ensures consistency, clarity, and accountability in the contract management process. It becomes the nerve center for decision-making, helping senior leaders review contract redlines, approve changes, and maintain a comprehensive overview of the negotiation landscape. A good deal desk will have a check list of all the things that each team needs out of the sales process and ensure each of those data points are ticked off, proper updated and formatted in a way to make a smooth transition to the next team.

Data Needs Of The Legal Team

The legal team needs to work with the deal desk to ensure that they receive enough context and the right introductions to quickly and effective negotiate contracts. Context is often not given to the legal team and this can cause slow turnaround for redlines. The context under which a customer will be using your product and who in their team will be using it will often give the legal team a much stronger idea of what they can push and leverage during negotiations to get what they need. It will also empower them to speak to the opposing counsel to contextualize things for them and give reason for redlines and push back. Being introduced to the right people to be having the conversation with is a no brainer but it’s often forgotten about. The legal team should be part of every sales persons multi-threading approach.

Data Needs Of The Finance Team

Contract signed and deal closed! We’re done right? Nope! The finance team take over now and they often have their work cut out for them. The deal desk function helps to get what the finance team needs extracted from contracts. Thought you could trust your CRM data? Maybe, if you’re a later stage startup. But often for early, scrappy stage startups your finance team will need to be sifting through contracts to find out what you need to bill people and when you need to bill them.

If you’re working day and night to build a tech startup and you’re sick of seeing the transfer of deals between sales, legal and finance cause friction efficient contract management is not just an option; it’s a necessity. By leveraging the right tools and implementing a deal desk function, your startup can navigate the complexities of scaling with confidence. Embrace the power of specialized tools like Contract Sent, and watch as your team achieves newfound efficiency, enabling you to focus on what truly matters—innovation and growth.


ABOUT THE AUTHOR
Contract Sent

A contract management system built for startups to manage, negotiate and report on their SaaS contracts.

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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