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Why you shouldn’t use your CRM for contract management — Legislate

Customer relationship management platforms (CRMs) allow businesses to manage prospects and keep track of their progression in a commercial pipeline. Whilst pipeline management can be achieved from a well organised spreadsheet, CRMs offer tools to make the business development process more efficient. Contracts are core to any commercial agreement which is why CRMs now offer contracting capabilities to generate and sign agreements with prospects directly from the customer’s CRM profile. Whilst this empowers the business development team to create agreements it should not be used to organise and manage contracts. This article highlights the limitations of CRMs for dealing with contracts and how they can be overcome with the right contract management platform.

Making and keeping track of contract variations

CRMs often offer contract signing capabilities based on a pre-approved template which automatically populates the terms based on the opportunity’s information and the customer’s details. A contract can be sent to the client for signature in a couple of clicks with this approach but it doesn’t offer the option to make changes to the contract’s structure and key legal terms. It is not unreasonable or uncommon for clients to request changes which means that the business development team’s legal counsel will need to review the requests and act on them. A more efficient approach is to empower business development teams with a contract builder so that they can make changes themselves which are already pre-approved by the counsel. Legislate allows these changes to occur even after a contract has been sent to a client which means the whole process does not need to be restarted.

Keeping track of legal updates

Legal updates are infrequent but need to be monitored closely. CRMs are not built to keep track of legal updates and might not offer efficient versioning which makes it difficult to know when a template was approved by who or if it is out of date. Equally, CRMs are not equipped for keeping track of template variations and what the variations mean. Templates can be adapted to specific clients or opportunities which need to be tracked as non-generic terms can lead to additional rights or obligations you need to be aware of. Moreover, the additional obligations often apply to team members who don’t have access to the CRM which is why it is critical that they are aware of them. Contract management platforms allow all team members to know which percentage of your contracts have non-generic terms and how they impact your business.

Extracting key contract insights

Whilst a CRM can report on the total value of your pipeline and the time it takes to close opportunities, these values might be contingent on contractual conditions such as trials or break clauses. A contract management platform like Legislate will indicate the actual total value of your active contracts which means that it will factor in break clauses and other conditions which could invalidate the monetary value of a contract. This ensures you are not over-reporting and helps you better understand the risks which could jeopardise deals.

Offering a great contracting experience to your customers

A pdf contract generated by a CRM is convenient to send but difficult to process and manage post signature for the invited parties. Contract management platforms like Legislate automatically create a vault for invited parties so that they can securely access their contracts from one place, pre and post signature. Legislate also offers different views of contracts to clearly represent key information such as rights and obligations so that they are understood without needing to sift through the actual contract. This offers a more complete contracting experience to your customers which establishes strong foundations for your commercial relationship.

This article has highlighted how the efficiencies unlocked by CRMs do not transfer well to contract management and can even create legal risk for your organisation. Using a contract management platform in parallel to your CRM addresses these problems whilst offering a better contracting experience to your customers. Legislate is a great platform for creating and managing lawyer-approved contracts in parallel with your CRM so that you can sign agreements faster. To create your first contract for free, watch a tutorial, book a demo or create your account now.

Originally published at https://www.legislate.tech.

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Charles Brecque

Charles Brecque

Charles Brecque is the Founder & CEO of Legislate. Find out more: https://www.legislate.tech