Contracts are the foundation of any business transaction, controlling every dollar that goes in or out of a company.

Each time a salesperson closes a sale, a sales contract makes that handshake a sound agreement outlining mutually agreed terms and documenting key details. These contracts set up successful business relationships by establishing clear parameters for payment, delivery, and other obligations for both parties.

In this article, you'll discover all about sales contract management, from the pitfalls in the conventional methods to what contemporary businesses are doing to avoid them. We will also go into great depth about the Zoho CRM and Zoho Contracts integration.

Sales Contract Management, a Bottleneck: Here's Why

Most companies do not have an efficient process to draft, execute, and manage sales contracts. Though deals are closed with the help of contracts, inefficiencies in this process—delayed drafting, extensive review, delayed signatures, and administrative onboarding processes—can sharply reduce overall sales performance.

Over 50% of business development executives say the inefficiencies in their sales contracting process delay revenue recognition.

Below are some important questions to gauge the health of your sales contracting process:

Are sales contracts accessible, organized, and retrievable?
Do you have an immediate go-to contract template repository from which to select the latest templates?
Do your key sales contracts go through a mandatory review process prior to signing?
Does your team know how many contracts are due for renewal this month?
If contracts expire without being renewed, is your sales manager alerted?
Can you indicate the number of contracts pending your legal team's approval? How many cycles of review have the contracts undergone?
Do you have the ability to monitor all contract revisions and changes in a contract at a single location?

Sales Contract Management: The Classic Way

Historically, sales teams constantly toggle between several applications to manage contracts at different stages of their life cycle. This process includes sharing information about deals from the CRM and working with stakeholders from different departments for creating contracts, reviews, and approvals. Absent a smooth process that creates transparency and facilitates easy collaboration with stakeholders, sales contract management often becomes a bottleneck for sales teams.

Contract Stage	Application Used	Activities
Contract creation	Word processor	Send deal information from the CRM by email to relevant internal teams (Finance, Legal). Have back-and-forth conversations with Legal to obtain the most recent templates since there is no centralized library of templates. Manually create contracts based on the templates.
Contract review and negotiation	Email application	Send contracts by email to internal and external parties for review. Use email conversations with document attachments for approvals and negotiations. Manually track outstanding approvals and negotiations.
Contract signing	eSignature software	Send completed contracts to the appropriate signatories for electronic signatures via eSignature tools. Have all parties sign the contracts within the agreed time frame.
Contract obligations	Spreadsheets	Monitor major contractual obligations (e.g., payment terms, deliverables, deadlines) in spreadsheets. Make sure the obligations that fall to you are completed in a timely manner.
Contract milestones	Calendar	Enter key dates like contract start/end dates, renewal due dates, and delivery milestones into a calendar. Create reminders for key milestones to catch action on time. Remind involved teams of upcoming deadlines (e.g., renewals, reviews) via calendar alerts.
Contract access	Document management software	Save versions of contracts in a document management system for access and retrieval. Lock contracts with access controls to prevent unauthorized changes or deletions.

Challenges in Conventional Sales Contract Management Processes

Human Errors

One of the key challenges in the traditional sales contract management process is the sharing of correct contract-related information. Sales representatives usually have all account or deal information residing in the CRM. Without a contract lifecycle management (CLM) system, they tend to forward the information required to respective stakeholders using emails or chat applications. This human-based information exchange between different tools raises the chances of errors introduced by human beings, missed details, and data inconsistencies.

Unexpected Risks

The sales teams typically maintain a collection of contract templates for frequently used contract types. When these templates are maintained in disparate systems like shared drives and spreadsheets, it poses the following risks:

Most recent contract templates are difficult to find.
Updating clause languages from time to time becomes a burdensome process, inviting the use of outdated templates.
Absence of fine-grained access control can result in multiple template versions.

These inefficiencies heighten the possibility of errors, leaving the contracts vulnerable to unexpected risks and performance decline.

Long Sales Cycles

When sales teams and other departments operate in silos to handle sales contracts, it creates a number of inefficiencies that add to long sales cycles.

A few examples:

To-and-fro emails among various stakeholders for reviewing contracts.
Delays because there are no automated reminders and activity tracking in approvals, negotiation, and signature phases.

These hold-ups can at times result in lost sales opportunities and delayed revenue recognition.

Poor Compliance

The main risk is the usage of old templates with archaic contract languages. Without a CLM solution, sales teams also tend to lose track of whether all parties are meeting their contractual obligations. Key payment, renewal, or deliverable deadlines can easily be overlooked in the absence of automated reminders or a single repository for tracking. Unmet obligations can have far-reaching implications, including revenue leakage, expensive lawsuits, broken relationships, and brand damage.

How Today's Businesses Are Solving Their Sales Contract Management Issues

Today's businesses are tackling these contract management issues by adding a digital contract lifecycle management (CLM) tool to their sales technology stack. With this integration, companies receive improved information flow among departments, seamless collaboration, lower contract cycle times, and effortless client onboarding.

Zoho Contracts and Zoho CRM Integration

At Zoho, we have an all-in-one CLM solution, Zoho Contracts, which can enhance efficiency throughout every phase of contract management. With Zoho Contracts integrated into Zoho CRM, you can automate the request for contracts and have complete control over the contract life cycle within the CRM platform itself.

This is how your sales contract management works with the integration of Zoho CRM and Zoho Contracts:

Salespeople are able to create new contract requests directly from a potential or deal record in Zoho CRM.
Account and contact information in Zoho CRM will be mapped automatically into Zoho Contracts, and a contract document will be generated with all information auto-filled from the predefined templates.
The contract will be automatically assigned to a contract owner in Zoho Contracts using the assignment rule specified at the time of installing the extension.
A duplicate of the contract document will also be accessible under the attachments tab in the deal record within Zoho CRM.
Sales representatives can send contract documents directly to counterparties via email.
Sales representatives can monitor contract statuses right from the related list of the deal record within Zoho CRM under the Zoho Contracts section.
Sales professionals can ask contract owners to advance approvals, negotiations, and signatures based on a contract's stage from within Zoho CRM.
The native eSignature feature of Zoho Contracts enables teams to sign and obtain contract signatures within minutes.
Sales professionals can also trigger post-execution request management for contract changes, renewals, and extensions directly from Zoho CRM.

Why Should You Integrate Zoho Contracts with Zoho CRM?

Fast contract generation with self-service contract requests.
Seamless collaboration and communication across sales and other departments with optimized workflows across the sales contract lifecycle.
Increased visibility and transparency of status of sales contracts and CLM operations.
Improved accessibility to critical contract data with centralized storage of all contracts and their supporting data.
Increased contract speed and easy customer onboarding with integrated eSignature capability.
Lower business risks with a single template repository, automated approval cycles, and end-to-end obligation management.
No renewal misses due to automated reminders.
Improved compliance with industry standards and government regulations.

Ready to redefine the contracting process for your sales teams? Our help guide provides detailed step-by-step instructions for setting up your Zoho Contracts and Zoho CRM integration.

Our Latest Insights

Latest Articles