If you’re one of those businesses still using spreadsheets to track contracts signed with SaaS vendors, you’re probably bleeding dollars now. It's 2023, and managing SaaS contracts is still overlooked by many mid and enterprise-scale businesses alike.
Be that as it may, you’re here reading this, so it's evident that you understand the importance of using a contract management system to manage SaaS contracts.
However, you’re also here with a question, right?
“How to choose a contract management system to manage SaaS contracts and invoices?”
With so many tools available on the market, choosing the right one can be challenging if you don’t know what to look for.
That's where this article comes in—we'll provide you with a roadmap of the crucial factors to consider when selecting a SaaS contract management system. These factors are all you need to choose the right tool to handle your contract management hassles.
Contract management systems: what do they do?
The tools vary in features and functionalities, but the core purpose remains the same—helping businesses centralize their SaaS contracts.
Organizations worldwide have eliminated spreadsheet-based contract tracking approaches by switching to contract management systems.
These robust tools can scrutinize and handle thousands of SaaS contracts, and the best thing is that they’ll organize them in a single dashboard for easy tracking and management.
Do my businesses need a tool for contract management?
We get asked this quite often, and our answer remains the same: Yes!
“A contract management system is necessary if your business operations rely heavily on SaaS applications.”
This next part is for business owners or IT, finance, and procurement professionals that still have second thoughts about choosing a SaaS contract management system.
Let's think practically. Suppose you’re purchasing a SaaS app with a 6-month contract, which you log in a spreadsheet.
When the renewal date approaches six months later, there is a high chance that your team may not be aware of it.
Furthermore, SaaS vendors are notorious for not sending renewal alerts to avoid renegotiation, resulting in contracts being automatically renewed without your knowledge and leading to financial loss.
So, using a tool is the right solution, and here’s how to select a contract management software.
Factors to consider while choosing a SaaS contract management system
This is the essential feature of any contract management SaaS tool. Look for software that’s capable of storing all the invoices and contracts in one place. It makes it easier for data retrieval, audits, and better tracking.
SaaS contracts differ in size, the type of information they hold, and the additional SLAs attached. An ideal contract management tool for SaaS must be capable of organizing them without hassles. And it should display all the contracts on a single dashboard to avoid needless navigation.
Suppose you want to look at a particular SaaS contract, then you should be able to do it in less than two clicks; that’s the type of sophistication you must look for in a SaaS contract tool.
Security should never be overlooked, as SaaS contracts hold sensitive information about the vendor and the buyer.
Ensure that your research team performs all the necessary background checks regarding the vendor and their tool. It must possess a credible track record for security.
Check reviews from platforms like G2, Capterra, etc., and then proceed to negotiate with the vendor. During negotiations, ask the right security questions regarding the applications and ensure to sign an indemnity clause so you won’t be held liable in case of a data breach in the future.
The tool must be compliant with all the necessary security regulations. Pull out of the deal if the vendor is not transparent enough to disclose the compliance certifications.
You can use this factor to shortlist potential vendors, as only a few invest their efforts to pass security audits, like,
- SOC 2
- PCI DSS
- ISO 27001
A significant reason to use software for contract management is to stay ahead of SaaS renewals. Tracking renewals on spreadsheets is not practical as they can’t notify you of contract renewals.
You need automated renewal workflows that begin 30, 60, or 90 days in advance and send consistent reminders until the contract is renewed. SaaS contract management tools are equipped to automate SaaS renewal workflows to stay ahead of renewals.
The IT, finance, and procurement teams will upload thousands of documents to the tool. To retrieve the right one rapidly, the team will need AI-powered filters to analyze the documents based on the search criteria and return the necessary documents in a snap.
Suppose you need to access a contract that is six months old, but you don't have any additional information about it. Searching for it manually in the inventory can be time-consuming.
However, you can expedite the process by specifying the upload date, and the software will retrieve the relevant documents for you.
Similarly, you should be able to search for documents using conditions like
- Upload date and time
- Uploader name
- Renewal date
- Contract value
- Agreement status
- Contract period
- And many more.
Manual metadata upload
Management tools can quickly integrate with your internal systems and retrieve all relevant information within seconds.
But your teams might still have dozens of spreadsheets with crucial contract information; in those cases, a contract management system should let you manually upload all the metadata from the sheets.
Only a handful of tools come with Excel data upload features. Teams can save lots of time with this functionality, and it's recommended not to overlook this feature while choosing a system to manage SaaS contracts.
Extract metadata for sheets
Uploading data sheets is not enough; an ideal tool for SaaS management should be able to extract all metadata from the sheets and present them in an easily accessible dashboard.
When selecting a tool for contract management, it's essential to choose one that integrates seamlessly with your existing systems and applications.
This criterion can help narrow down the list of suitable vendors by creating a final selection of best contract management systems with the most integration capabilities.
Look for a tool with,
- SSO integration
- Finance system integration
- HRIS integrations
- Direct integration capability with applications
SaaS contracts are signed with vendors, so it is essential to have consistent communication with them. A healthy relationship can help you retain the vendors and possibly get access to their discounts, saving you on SaaS expenses.
In a nutshell, a contract management system for SaaS should also double as a vendor management tool.
What is the best contract management SaaS tool?
You can use the listed factors to select the right software to manage SaaS contracts.
Let us recommend the best contract management SaaS tool that checks all the boxes: CloudEagle.
CloudEagle is a SaaS management platform with all the necessary features to manage SaaS contracts.
- It has a centralized and secure inventory to store all your contracts and invoices in one place.
- It is equipped with SaaS renewal workflows that trigger 90 days in advance and keeps escalating to various stakeholders until the contract is renewed.
- Powerful condition-based filters to help you retrieve the correct document in a snap.
- It will let you manually upload your excel sheets and automatically extract all the relevant details from the sheet.
- CloudEagle has robust integration capabilities.
- It’ll let you communicate with vendors, manage them and monitor their policy changes consistently.
The best CLM tools are not the ones that can only manage SaaS contracts. As contracts are related to applications and vendors, you’ll need a comprehensive tool to manage applications, vendors, and SaaS contracts.
And CloudEagle is one of the few tools capable of doing it, which is why we consider it the best contract management tool for enterprises.
Still, if you want to explore more options, here you go.
SaaS contracts are a vital agreement between vendors and buyers; they hold sensitive information, and tracking them via spreadsheets is not viable.
This is where management tools come in. And this article showed you how to select the best contract management tools to manage SaaS contracts.
The listed factors are some standard criteria businesses consider before selecting the right SaaS contract management sytems.
So, what do you think?
You could take the long road and do some research to find the right tool on your own. Or, if you'd rather hit the ground running, you could chat with our experts and get started immediately.