Salesforce Contract Management: Definition, Process, Essentials Capabilities & More

Contract Management for Salesforce

Salesforce Contract Management Overview

Contract Management on Salesforce is the process of managing contracts from vendors, partners, customers, or employees. Build on the Salesforce platform, contract management software helps companies in every industry vertical reduce compliance risks and close more deals.

Contracts are essential to companies of all shapes and sizes. Every business should care very much about what’s inside its contracts, because they are binding, and govern over 80% of transactions and value. Contracts outline the rights and obligations of the company and its customers, vendors and partners.

For many companies, contract management still means the, “stuffing executed contracts into the overflowing filing cabinet, never to be referenced again.” On the other side of the spectrum, when contract management is handled in the Salesforce Cloud, contract management includes self-service portals, Legal pre-approved templates, Legal playbooks, and electronic signature (e-signature.) In this world, Legal resources are free to manage by exception, and can focus attention on the critical, or non-standard, contracts that typically introduce risk into the organization.

Be sure to download a complimentary copy of the Ultimate Guide to Contract Management for a detailed look at how contract management is important to every business.

Contract Management Integration with Salesforce

It is vitally important that enterprise companies ensure the connection of their front end CRM with their sales process. Contract Management – the negotiation, creation, and organization of contracts – is a vitally important aspect of that sales process that takes over after the opportunity has been created in Salesforce. This process is called the Quote-to-Cash process.

CLM is the backbone of this Quote-to-Cash (QTC) process. While contracts are important in their own right, they are even more important when you consider their role in QTC.

What is Quote-to-Cash

Quote-to-Cash is the end to end business process between the buyer’s interest in a purchase (the creation of an opportunity in the CRM) and the final realization of revenue. It includes creating a quote, responding to RFPs, submitting a proposal, negotiating and managing a contract, fulfilling orders, recognizing revenue, ensuing compliance and tracking payments.

Why is it Important to Integrate Contract Management with Salesforce

If you hope to create the most effective and positive buying experience, but you ignore contracts, you are seriously risking the success of your business. The contract is the physical output of every deal. By integrating contract management into Salesforce, through the entirety of the Quote-to-Cash process, you achieve significant efficiency, accuracy, sales velocity and customer satisfaction. Business moves to fast to manage your contracts in a process that is manually intensive and riddled with bottlenecks.

CLM is the backbone of this Quote-to-Cash (QTC) process. While contracts are important in their own right, they are even more important when you consider their role in QTC.

The Salesforce Contract Management Lifecycle


1) Request:

A business user asks for a contract

The initial step in the contract management process is for someone in the company to request a new contract. By automating the contract request process with a guided self-service tool, individual business groups can request the contracts they need and contract creators can respond according to measurable service level agreements.

2) Drafting:

A Contract is Created

The ultimate goal when drafting the contract is to eliminate manual work and reduce the time required without introducing unnecessary risk. With effective contract management on Salesforce, the contract creation process can be significantly automated with centralized templates that are automatically filled in with contract details. Your team lives in Microsoft Word, so finding a tool that integrates with Microsoft Word is crucial to the successful adoption of CLM.

3) Negotiation:

Terms are agreed between parties

You have to be careful that you aren’t limiting the scope of negotiation to price during your contract negotiations. Everything about the business deal is included in the contract – nearly all of these terms are potentially open to negotiation. Companies need to make sure those terms offer the best outcome for your business while still remaining agreeable to the other party.

4) Approval:

Internal controls ensure the best outcome

Part of the challenge of approvals is finding the right balance between too much and not enough oversight. This is where the speed vs. control conundrum is felt most acutely. It is critical that your system has the ability to facilitate the approvals and controls needed to protect the company’s interests while maintaining the flexibility to automatically navigate the quickest route to executing the agreement.

5) Execution:

The contract is put into effect and placed in a repository

Execution is the stage where the contract goes into effect, at which time the terms become a set of instructions for the different parties who need to deliver against them. This is where having a seamless process for getting contract details to fulfilment is critical. This is also where revenue recognition kicks in.

6) Obligations:

Ensure both sides meet their end of the agreement

At the obligations stage, the real work starts. Your sales contracts put you on the hook to deliver gods and services, to meet deadlines, to issue reports and to do many other things. Your contracts also entitle you to get paid if you live up to your end of the agreement. With strong obligation management tied into CRM and ERP, you won’t miss a deadline or lose track of a payment.

7) Compliance:

Meet all reporting, search, and government requirements

While you’re handling all the obligations created by your contracts, there are plenty of other things you need to do with your contract data. You must provide regular reporting to internal and possibly external parties about the contracts you have and your performance to your obligations. You also might need to locate specific contracts to comply with industry requirements, government regulations, audits and responses to lawsuits. To meet all these needs, it’s important that your repository have detailed search and reporting capabilities.

8) Amendment and Renewals:

Contracts are changed and renewed, and the cycle starts over

Before your contract expires, you’ll probably want to send a new version to your customer for renewal. This will kick off a new round of drafting, negotiation, and so forth. It is easy to lose track of renewals. Your contract management software should provide alerts, reporting and search abilities that enable you to stay on top of renewals and handle amendments.

4 Steps to Achieve Salesforce Contract Lifecycle Management Excellence


Get Your Contracts in One Place

At the most basic level, contract management is getting your contracts into one digital central repository. Once your contracts are in one place, you’ll be able to search and report, control access, get alerts for key events and more. You’ll have gained a business advantage from your contracts – and you’re still only getting started.

While not everything that is required for a successful contract management solution, this is the most important starting point.

Define Process and Performance Metrics

The next step is to automate the process of how each person in your company interacts with the contract lifecycle. Set up workflows for contract requests and approvals. Create and enforce service levels and commitments for your company’s teams to work together on contracts. Your goal is to get the organization comfortable with contract management software.

This step offers big gains in contract cycle times which leads to more closed business. With these two steps in place, you will have a positive top-level effort for your company.

Build Contracts Smarter

Next, you need to automate the drafting and negotiation processes with electronic templates, legal playbooks, self-serve contract portals and integration of Microsoft Word with contract management software. This step offers further gains in cycle times, and also gives companies a leg up in negotiations.
By doing this you will drastically reduce errors and the risk involved with making such errors. This will also help drive the contracting speed necessary to drive successful sales.

Integrate with Quote-to-Cash Lifecycle

Successful contract management on its own is vital to the success of any enterprise organization, but investment gets more impactful as part of an integrated Quote-to-Cash solutions. By encompassing Contract Management with Configure Price Quote, Revenue Management, Incentives, and E-Commerce, you can ensure that efficiency, visibility and control extend from the start of your sales process, through your contract lifecycle, and into revenue recognition.

Apttus Salesforce Contract Management Software Solution


Salesforce Contract Management Software from Apttus helps legal teams bring control to the CLM process without standing as a road block to revenue. Accelerated contract lifecycles keep your sales teams ahead of the competition; centralized legal playbooks and audit trails keep you 100% compliant. Apttus Quote-to-Cash combine the award-winning Apttus CPQ solutions, Contract Management and revenue management applications into a single license allowing you to drive revenue more effectively with a fully integrated, single data, model. With Apttus Quote-to-Cash, you can master your entire revenue-generation process to sell more intelligently, outsell competitors and raise your performance in the marketplace. Learn more about Apttus Contract Management on Salesforce.

Interested in more Enterprise Contract Management best practices and tips? Download a complementary copy of the Ultimate Guide to Contract Management.
Ultimate Guide to Contract Management