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Everything You Need to Know About NetSuite Contract Management
To stay viable, software companies rely on recurring income from contract maintenance and licensing. To gain success, managing and enhancing these predictable sources is crucial. However, due to their reliance on antiquated, cumbersome technologies, many software companies today suffer revenue losses and client churn.
This is often the result of contract renewals and recurring revenue tracking being handled manually. It's critical to use sound management techniques when handling renewable contracts, just like you would with any other area of your organization.
In this article, we will go through NetSuite's Contract Management module. You'll learn about its various functions, how it works, and the benefits you stand to gain.
NetSuite Contract Management: What is it?
NetSuite Contract Management is a native module included with NetSuite CRM readily available after seamless integration. It essentially eliminates the need for manual contract creation and issuance relating to contract and vendor records.
The contract renewal process is seamlessly automated by this module, enabling users to track renewable assets and manage recurring revenue in real-time.
You can expedite the entire contract renewal process, including the approval and returns procedure, with the help of this cloud-based contact management software. Simply put, it enables you to effectively manage and automate your contract management process.
Through user-friendly, real-time dashboards, you can track renewable and expired assets to maximize your revenue. You would be able to give a consistent experience to stakeholders, including your customers, and you could also spot chances for upselling and cross-selling to increase your revenue.
Apart from these features, here is a summary of every function NetSuite Contract Management has:
- Automation of renewals for a flexible automated procedure
- A singular platform that manages multiple contracts
- Ability to recognize revenue
- The ability to manage uplift and discounts and set up individual customer discounts
- Cross-sell and up-sell management tools that make it simple to spot cross-sell and up-sell chances for a potential boost in overall profitability
- Optimization of recurring revenue streams for real-time reporting and visibility
- Service and sales estimation
- Price management
- Management of recurring invoices
- Self-service capabilities for customers
Benefits of NetSuite Contract Management
Next, let's take a look at how exactly you can benefit from NetSuite Contract Management's numerous functions:
Streamlined business processes
Maintaining the various transactions with a customer over the course of a year is one of the many problems with renewals.
Instead of managing many contracts for the same customer, contract management allows you to combine multiple sales orders with renewable items that co-terminate and renew year after year into a single contract. This streamlined method makes sure that efficiency is apparent during the renewal process.
Automation of Renewals
NetSuite offers automated renewal solutions to make it easier for you to keep track of records and transactions. For instance, Software companies that supply perennially licensed and term-licensed products can manage periodic billing of both on-premise and on-demand software licenses using NetSuite's flexible and powerful automated renewing approach.
When the current contract is due to expire, NetSuite will immediately initiate a new sales transaction. As the sales transaction serves as a reminder to follow up with your customer and achieve a renewal, this lowers customer turnover. Due to the risk of sales transactions being pre-populated with client and contact details, including renewable products, having the sales transaction prepared automatically saves you time and lower the possibility of errors.
Revenue Recognition
Contract renewal revenue is frequently ignored by businesses. Typically, revenue recognition occurs simultaneously with transactions. Depending on the nature of the transactions, revenue recognition may occasionally need to be managed individually. This division of income recognition frequently calls for the development of yet another process, increasing the burden and duration of renewal.
Users of NetSuite can handle various sets of dates for the sake of revenue recognition. With the help of this functionality, contract renewal and payment processing can proceed without hiccups, and revenue recognition can be managed in a different method without requiring additional complexity or a new set of spreadsheets.
Real-time reports and data flow
For the recurring revenue stream to be optimized, monitoring and real-time intelligence are needed. All too frequently, revenue leakage, customer attrition, and missed opportunities for an upselling result when customers renew numerous goods or services at once.
As such, the contracts that have expired, those that will expire soon, and those that will expire later are shown on NetSuite's real-time dashboard. This gives you the knowledge you need to deploy efforts to contracts that have expired or will soon do so in order to maintain recurring revenue. The dashboard can be altered to display the important data you require to manage your business, allowing for complete visibility.
The Process of NetSuite's Contract Management
With the benefits and functions out of the way, let's get into how the module actually works. What does the entire process look like from an overhead view?
- Your sales order serves as the initial step in the contract renewal process. You may keep track of information like a start date, end date, and term lengths by using fields on your sales order that are specific to contracts. It handles non-renewing items including tangible commodities, time-billed expenses, and one-time services with ease. Usually, a contract is made once the sales order has been approved.
- A renewal contract will be made once the sales order has been accepted. The creation of renewals will continue indefinitely from this point forward unless your customer decides to stop using the services since they are no longer necessary.
- NetSuite can manage requests to up-sell your customer with new services during the life of the contract, exchange one service for another, or altogether delete a service from the existing contract. To make a sales order or return authorization, you simply follow your usual procedure with a few small changes to how you construct them.
- NetSuite will generate a renewal transaction with your renewable products before the contract expires. The ability to determine how far in advance of renewal the renewal transaction is created makes contract renewals flexible. In order to meet your company's needs, contract renewals also provide you the option of selecting which transaction to make.
During the entire process, contracts are imported or scanned and stored in a database. Users set up the system with user roles, workflows, authorization rules, and regulations. The software then categorizes and stores various sorts of contracts, matches recurring invoices to contracts or identifiable tracking numbers like utility account numbers, and searches and determines which invoices are related to each contract.
The provisions of the contract are used by NetSuite to automatically generate a supplier invoice if the supplier does not send regular invoices. If a scheduled recurring invoice is not received, users may also be informed.
NetSuite Modules That Work With Contract Management
NetSuite is considered to be the best ERP in the market mainly due to its modules that work seamlessly together. There will always be one aspect of business that can connect two or more modules together.
Suitebilling
The volume, tiered, and flat pricing models offered by Oracle NetSuite SuiteBilling give your team more options when it comes to invoicing by allowing for customer-specific pricing and discounts. Tools for managing change orders, subscriptions, and renewals give your team the adaptability needed to satisfy all customer requests. While allowing you to make data-driven business decisions thanks to the ability to view activity in real-time.
Fixed Assets Management
From creation to depreciation, revaluation, and retirement, NetSuite Fixed Asset assists you in maintaining and controlling the whole asset lifespan. It provides you the authority to automate your company's asset management procedures and do away with human labor and spreadsheets.
The Fixed Asset Management program handles maintenance plans, asset insurances, and much more in addition to supporting your asset purchases, depreciation, revaluations, leasings, retirements, and sales.
Customer Relationship Management
Sales, marketing, and customer management are the three main components of the customer relationship management system known as NetSuite CRM.
Additionally, the software offers a robust analytics tool that aids management in tracking and keeping track of consumer data as well as pinpointing key performance indicators in areas that need improvement. The great level of customization and customization offered by the NetSuite CRM platform makes it perfect for use in a range of industries.
It is important to note that NetSuite CRM has contract management built-in, and gives you the option to activate upon NetSuite integration.
Conclusion
With NetSuite’s Contract Renewal Module, you can deliver a consistently positive customer experience, improve retention and scale your business.
We hope that this article has been helpful in communicating the importance and benefits of contract management. For more in-depth information about contract management, please feel free to contact us so we can talk about bringing out the full potential of your business.
If you wish to learn more, you may find this article about NetSuite for eCommerce interesting.
