The Salesforce Contract object was originally designed for manufacturing and professional services companies. In short, it wasn’t meant for a SaaS world with frequent amendments and changes in billing methods. However, since contracts already existed as part of our accounting processes, companies used the object as our revenue foundation, adding in orders, subscriptions, and renewals.
Today, RevOps professionals often find themselves in the role of “accidental Salesforce admin,” trying to customize the Contract object. This level of customization requires development knowledge, UI skills, and UX experience. No one can learn all this in their day-to-day role—and they really shouldn’t have to.
“Even if it's not a contract, we'll call it a revenue contract. And that's how you book things. And so the contract just kept on coming back.” - Matt Pieper
Jump to the clip to learn about the origins of the Salesforce Contract object.
With SaaS companies relying heavily on subscription models, amendments are inevitable. Unfortunately, adjustments to contracts are more than a little cumbersome in Salesforce. Every time you try to change a contract, it's a battle. These systems aren’t built for continuous adjustments.
The problem is intrinsic to the concept of a contract. Contracts are legally binding and the customer is locked in. This caused a lot of problems in 2020. Companies that had contracts for 100 users suddenly needed to cut their user count in half. Many tried to save money by consolidating and amending their vendor agreements to use other products. Revenue systems don’t really provide this flexibility, putting vendors at odds with their customers.
Jump to the clip to hear how the market has changed in the SaaS world.
Companies are embracing usage-based billing as a more flexible revenue model. While perfect for the fluidity of SaaS, it’s introduced challenges for managing contracts and ensuring accurate billing. Usage-based billing blows up the old contract system. You’re no longer just selling a product or a service; you're selling how much of it you use. The Contract object was never built for this.
Revenue platforms overall aren’t set up to connect usage and billing data. When ERPs, CPQ systems, and contract management tools are all operating their own revenue recognition workflows, it’s harder to identify opportunities or risks and even harder to share accurate usage data with your customers.
Jump to theclip to hear about the prevalence of usage-based billing as a revenue model.
McArthur and Pieper dive deeper into how traditional contract and order systems simply aren’t built for the modern, subscription-based business models that dominate the SaaS industry. McArthur explains that “the Contract object works well when you're selling cell phones. But the moment you have to add minutes, the whole system starts to fall apart."
The Salesforce Contract object's limitations stem from its roots in older, more rigid sales models—ones that don’t accommodate frequent changes, custom terms, or variable billing cycles. RevOps teams need solutions that integrate contract management with real-time customer data, ensuring they can track customer interactions, billing, and service delivery as a cohesive whole.
“There’s the thing that you bought… and then you need to have a relationship. I see contracts as a limitation where you're bifurcating your customer journey.” - James McArthur
Jump to the clip for a discussion on the frustrations of “cancel and replace” contracts.
Internal communication and education can help revenue teams use contract systems more effectively. Too often, sales, finance, and operations teams work in silos, leading to misalignment and errors in how contracts are executed. Training your teams, both in sales and operations, is key. If they don’t understand how the system works, they’re going to make mistakes. You can’t just throw a contract object at them and expect it to work perfectly.
Misalignment between teams can cost time and money. Clear communication and ongoing education ensure that everyone involved in contract management understands the capabilities and the limitations of the systems they’re using. For RevOps professionals, ensuring this alignment is vital for smooth operations and error-free contract execution.
Jump to the clip to hear about the challenges of training sales reps to handle contract changes.
McArthur and Pieper agree that managing contract data across different systems often leads to fragmentation and inconsistency. It’s a disaster waiting to happen when your CRM shows one contract value, but your ERP shows another. Make sure your systems are integrated and talking to each other, whether through a middleware solution or a full-stack tool. You can’t let these silos exist if you want accurate reporting.
“When you look at revenue recognition, people do it differently across every single one of these platforms. And these platforms aren't communicating consistently across one another.” - James McArthur
Jump to the clip to understand the realities of having CPQ, contracts, and finance on different systems.
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