Standardization provides employees with clear information. It also ensures consistency in the flow of contracts through negotiation, signature, and approval processes. Even better, you can foster better communication between employees and departments. Bottlenecks and slowdowns can often occur as a result of waiting for in-process signatures. If your company regularly suffers from slow signatures and your team’s hands are tied, reach out to the other departments. One way to speed up the signature process is to create standard process documents for contract departments, salespeople, finance teams, and any other relevant parties in the company. First, read our complete guide to reducing contract processing time from sale to signature for more ways to bridge the communication gap. Then create these five standard process documents. They may be exactly what your company needs to speed up signatures and keep your contracts moving.
1. Standard Contracts
It’s likely your company deals with multiple types of contracts and service agreements. When your contract team or sales team needs to start from scratch with each new customer or vendor, it increases the time it takes to get signatures and close a deal. Create a standard process document that lists the type of standard contract templates available for use and under what conditions each contact should be used. Make sure this list stays up-to-date and the templates are regularly revised. This will ensure each person uses the right contract in the right situation, so they don’t waste time using the wrong contract and making corrections later. Additionally, employees don’t need to spend time searching for the appropriate contract because they have a list in front of them to guide their choice.
2. Assigned Workflows
Your company has some type of “chain-of-command” for contracts. This contract workflow might include supervisors, managers, and C-suite executives in different departments. Those who have been with your company for some time likely know where contracts need to go for approval signatures and execution. But it can take new employees some time to learn the ropes, even if the workflow is automated in your contract management software. You can give a helping hand to new hires and ensure clarity for long-time employees by creating a document that lists or displays the key decision-makers and signatories in your company. Also, include the order in which each of them receives contracts for approval or signature.
3. Lists of Non-Negotiable Items
It’s not uncommon for wheeling-and-dealing to occur with contracts. You can expect new and old customers alike to request discounts, term length changes, or adjustments to the MSA. No matter how much you want to please a customer or vendor, some things are non-negotiable. Create a standard process document outlining any non-negotiable items, removing all questions for those who directly negotiate with customers. This will provide consistency among salespeople and negotiators. Also, this can prevent dropped contracts and lost deals as a result of the sales team or negotiators promising things they cannot deliver.
4. Thresholds for Negotiations
Although plenty of non-negotiable items exist in your contracts, you likely have several items that are up for debate. Sometimes sales teams and negotiators need to make concessions or offer discounts to land a deal. You never want to put your negotiators in a situation where they are over-promising things to customers. When sales teams cannot get approval on the things they promise customers, it’s bad for business. Also, it undermines their authority in front of the customer. Not only might this create distrust, but it might result in losing a deal or losing a long-time customer. So create a standard process document that clearly communicates the leeway negotiators have in a deal. When you offer clear thresholds for changes in length or discounts, you increase accuracy. Even better, eliminate the need for salespeople to request approvals that will get denied every time.
5. Contingency Plans
Even with carefully thought-out business practices, sometimes things don’t go as planned. Perhaps a decision-maker is out of the office and unreachable for a period of time. Maybe a customer has a highly abnormal request that they haven’t come across before. So create a separate “What If?” standard process document that covers emergency situations and challenging issues. This can help new employees save face with customers and avoid pitfalls and mistakes. This can be just as crucial as the lists of non-negotiable items and negotiating thresholds. Also, if a salesperson has no idea what to do, this document can provide insight on what actions to take, like who to call to make sure the deal gets closed.
Creating standard process documents improves communication across the company. Contract management software can help you create and store these documents. With the right cloud-based tool, relevant parties have access to everything they need to finalize strong deals. Contact us to learn more about using contract management software to standardize your contract life cycle and sign up for a demo.