6 common contract bottlenecks salespeople face
Many sales teams face challenges with common contract bottlenecks, which are time-consuming and costly. They often divert intensive salesperson hours and significant attention to one contract. It could be that the counterparty is taking too long to return a signed contract or that legal is taking too long with an agreement. Your sales team needs a solution that handles these common problems and turns your contract processes into assets rather than liabilities.
What is a contract bottleneck?
A contract bottleneck is a point in the contract lifecycle that is slowed down by an inefficient process. Common contract bottlenecks include:
- Waiting for contract counterparties to review and sign the agreement
- Long delays in the legal department
- Manual contracts that are difficult to store
- Ineffective presentation method for contracts
- Lack of insights into the contract process
Too many companies get bogged down in getting a contract signed or enforced. Eliminating these bottlenecks helps your sales team move contracts through the sales funnel more efficiently. Instead, they can focus on acquiring new relationships and new deals. This puts the team to use generating revenue for the company—not wasting time chasing down delayed contracts.
The right software focuses on relieving these problems and eliminating these bottlenecks. Here are a few more bottlenecks to look out for:
1. Waiting for counterparties to sign
One of the biggest time killers in the contract management process is waiting for a signature. Contract redlining requires numerous back and forth exchanges over email and separate Word documents stored on various computers. This can take days, weeks, or even months to finalize, and there is no centralized location to track all the activity.
Your business can take steps to reduce the counterparty approval bottleneck and speed up the process. You can invite your counterparty to collaborate with you on a shared platform to reduce the time spent negotiating by 43% or more.
You are no longer stuck with email threads, tracking down different contract versions, or playing phone tag with your counterparty. You can connect in one place and get contracts done much faster by:
- Giving the counterparty the same tools you have access to
- Keeping your contracts and data secure
- Aligning with your internal team and the counterparty in a central location
- Using a chronological activity feed that gives all relevant actions and details surrounding the agreement
- Permitting the counterparty to invite their team members to expedite the negotiation
2. Long review times by legal
Many legal departments take a long time to draft, negotiate, and approve a contract. The sales team, on the other hand, wants to avoid this bottleneck to ensure the deal they won goes through quickly.
One of the main reasons legal is a bottleneck is the contract process itself. When contracts are manual and unorganized, legal has to spend a lot of time reviewing documents to reduce liability. That is their job—to protect the company and create enforceable agreements. Manual contracts, unsophisticated signature methods, and lack of a centralized contract repository can slow down Legal’s processes.
Better contract organization that lets legal quickly identify and find contracts can reduce this turnaround time significantly. A sales team can avoid this bottleneck by creating an operating procedure with legal to encourage them to organize contracts by sale or value.
The right CLM collaboration tools can help eliminate or reduce this common contract bottleneck. Contract collaboration software helps legal teams manage contract redlining and revision all in one place. Legal can edit, track changes, and comment on contracts in a single platform to create more visibility into the contracts.
Internal comments and @mentions let you loop in the sales team and Legal colleagues and get opinions in seconds. Old methods required saving a new version of the contract, attaching it to an email, and waiting for a separate response. That does not have to be the case.
3. Manually managed contracts
The modern business era uses electronic and digital contracts all the time. Contracts that are updated manually slow down your ability to do business. They require a sales team member to manually make changes to a document, send it to legal, and wait for approval.
PDF contracts and those stored on personal computers or in inboxes take much more time to review. Terms are not standardized, and an attorney must review the entire contract to ensure it is correct. Automated contracts can standardize language to save time reviewing what has already been approved. Instead, sales and legal teams can focus on the changed terms to significantly reduce the time it takes to approve a contract.
Automated contract software lets your company:
- Create no-code capabilities for contract automation to eliminate delays
- Use digitally native solutions to expedite contract approval
- Self-service many contracts to reduce employee time spent on individual contracts
- Provide easy-to-use signature methods for counterparty approval to reduce negotiation time
- Accept/reject changes in an editing platform to reduce how long it takes to get an acceptance
- Use Word/DOCX native documents for seamless negotiation with your counterparties to secure acceptance faster
4. Unsophisticated storage
Another common bottleneck for manual contracts is how they are stored. Many companies may still use physical filing cabinets, and others may use cloud or server storage. A digital contract repository can store records in one place and make it easy to find documents with a simple search.
This advanced storage method makes it easy to find and analyze contracts. You have access to tools and advantages like:
- Intuitive search, including structured and full-text search
- Process metrics and data reporting
- Answer questions about contracts in seconds (i.e., what is the renewal date?)
- Analyze contract metadata and metrics stored in the system
5. Poor contract presentation
Many companies present a super long contract, email it as a PDF, and then expect a quick response from their counterparty. This presentation method and others like it create a substantial contract bottleneck that reduces efficiency and impacts your revenue. When you send this kind of contract to a counterparty, you aren’t likely to get a quick response.
Instead, you can use short and sweet contracts that link out to your standard terms. This works for disclosure agreements, terms of service, privacy policies, and many other agreements. Most of these contracts contain standard terms that are not negotiated. Instead of presenting all of these terms in one long contract, a link to those terms lets a counterparty access the agreements whenever they need to read them on their own time.
Reviewing and approving these terms may take too long, creating a bottleneck for your company. The solution is to organize your contracts and automate standard term agreements. Doing so can empower your sales team to get quick approvals that let them focus on generating new deals, new business, and new revenue. You can present agreements in a way that makes it easy for counterparties to sign and accept the contract through tools like:
- Clickwrap agreements
- Embedded contracts
- Public workflows
6. Lack of insights into contracts
As salespeople, you often know only what legal tells you, making sales visibility into contracts nearly impossible. You do not have access to essential data that could help drive future business and improve your own processes. You need to know when a contract is signed, the delays to signing, and other information about the status of a deal.
The solution is contract visibility. Sales teams can get insights into the status of their contracts at any given time with an activity feed that shows what’s been done. You can even focus on contract metrics that matter to sales teams. These might include, but are not limited to:
- Contract turnaround time
- Corrections and redlining
- Review and approval metrics
- Performance indicators
- Efficiency and performance metrics
Eliminate contract bottlenecks for your sales team
The right contract lifecycle management platform can reduce or eliminate common contract bottlenecks your sales team faces daily. These bottlenecks are often the result of delays in legal, legacy contracts, or difficult-to-use contract storage methods. You can enhance contract visibility with an activity feed and improve how you store and manage your contracts.
Collaborate effectively with counterparties and automate your contracts to save time and money. Empower your sales team to do what it does best. You do not have to continue with an inefficient and costly process that creates contract bottlenecks.