Salesforce Contract Management: What Is CLM and Its Advantages?

Contract generation takes up a significant portion of the sales cycle between drafting, negotiation, and approval. This is exactly why an inefficient contract management process can occupy valuable resources, make it harder to keep prospects engaged, and act as a major roadblock in your sales pipeline. 

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Even still, just 11% of businesses consider their contracting process highly effective. 

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Fortunately, with the right contract lifecycle tools, you can root out inefficiencies in your contract management system and effortlessly guide customers to the end of your sales pipeline—in other words, close more deals quickly. 

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Salesforce contract management tools, in particular, may be precisely what you need. 

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Understanding Contract Lifecycle Management (CLM)

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Contract lifecycle management (CLM) encompasses all the stages of creating and finalizing legal agreements, including agreements with your vendors, business partners, and employees. However, CLM also plays a key role in the sales cycle as you enter into client contracts. 

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Modern CLM processes leverage digital tools to guide stakeholders through each stage of contract development:

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• Contract request and initiation
• Authoring

• Negotiation and revising
• Review and approval
• Execution and administration
• Storage and retrieval
• Reporting
• Renewal or termination

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What does this have to do with Salesforce?

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Put simply, integrating your CLM system with Salesforce gives your sales reps instant access to critical information about client contracts. So, instead of waiting for a response from your legal team between each step of the cycle, your reps can take a proactive role in contract management that enhances prospect engagement and supports their win rates. 

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Key Features of Salesforce Contract Management

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Although Salesforce doesn’t come with an out-of-the-box digital contract management tool, it does offer powerful integrations with other CLM applications. This means you can integrate Salesforce with CLM applications to link your sales processes directly to your contract and document management, allowing your sales team to actively participate in ongoing negotiations and renewals.

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Vlocity, a Salesforce subsidiary, is a popular CLM choice because it’s built natively on the Salesforce platform. Its capabilities include:

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• Managing different types of contracts, including sales-related agreements and standalone contracts
• Creating and managing a database of contract templates
• Developing custom conditions for contract automation
• Generating documents such as quotes, proposals, and service agreements
• Storing contracts for review
• Customizing and updating documents
• Sending reminders
• Securing digital signatures
• Initiating automatic contract renewal
• Tracking changes in contract terms

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Integrating these core contracting features with sales processes and sales data in Salesforce eliminates the need to manually reference reports and enter data in multiple programs. Not to mention, automated reminders engage prospects at the optimal time based on their place in the contract lifecycle, encouraging initial conversions and client retention.

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Advantages of Using Salesforce for CLM

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If you use Salesforce for your CRM, you can manage your contracts on the same platform to encourage cross-departmental collaboration and actually speed up the sales cycle. In fact, with proper implementation, CLM software tools can reduce the average length of the contract lifecycle by 82%. 

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Using a single sales and contract administration platform also supports your data security by facilitating consistent data governance rules. For instance, Vlocity’s consolidated contract system within Salesforce creates a consistent structure and logic for handling client contracts. This, in turn, improves compliance and increases the visibility of the contracting process. 

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Additionally, companies that pursue Salesforce CLM integration can generate reports on the entire contract lifecycle and make adjustments based on their findings to boost closing rates and improve the quality of their contractual agreements.

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Best Practices for Successful Salesforce Contract Management

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Whether you’re using Vlocity or connecting Salesforce to another third-party CLM tool, following a few best practices can help you seamlessly connect your contract management with your sales process. 

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To that end, implement these tips as you navigate the setup and administration of your legal document management in Salesforce:

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• Complete a full data migration to Salesforce to keep your documents organized in an accessible central location
• Customize pre-built contract templates based on your business’s specific products, services, and bundle offerings
• Clearly define configuration rules based on client conditions to support automated contract generation
• Align your quoting and pricing system with contract generation rules to ensure a consistent client experience
• Regularly generate reports to track the health of your contract management ecosystem
• Review your custom document generation settings after any updates or upgrades

Leveraging Operatus With Salesforce for Enhanced CLM

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CLM systems are most effective when directly integrated with your sales process, creating a cohesive sales ecosystem. If you want to enhance your CLM through Salesforce contract management, Operatus provides expert integration solutions designed to boost the performance of Salesforce tools.

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In fact, by choosing Operatus for your Salesforce contract management integration, you can count on specialized support, ongoing assistance, and overall process optimization. 

In short, we’re committed to doing all we can to accelerate your growth. 

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Reach out today to learn more about how the team at Operatus can build upon your Salesforce tools to develop streamlined, growth-focused systems.