Sales Agreement Templates

5 Steps for Designing a Deal Desk Approvals Process

Dan Veres
Jun 15, 2023

Dwight was on the sales streak of his life. 8 deals closed so far through the quarter and over half a million in revenue. He was atop the sales leaderboard and the toast of the town at his company, Dunder Mifflin. Even his boss, Michael, was starting to appreciate him. 

But the high didn’t last. It wasn’t long before Dunder Mifflin started to feel the effects of Dwight’s deals. The first customer exercised their early termination rights - how did that clause get in there? The second customer almost gave Dwight’s finance team a heart attack - their contract gave them 180-day payment terms. Talk about a hit to cash flow.

The third customer? Well that deal was the worst of all… somehow they had talked Dwight into an 80% discount! Dunder Mifflin was losing money on this customer. Lots of money! 

Approval Process with RevOps

Sales is a tough job. It’s only natural that some salespeople will put whatever they can in a deal to get it done and hit their quota. That’s why it’s important to have rules and guardrails in place when it comes to what sales can and can’t offer in terms of discounts, terms, billing schedule, and more. But how do you decide what those rules are? Should your reps be allowed to discount up to 10% or 15%? In what scenarios are they allowed to offer quarterly billing? When can they agree to redlines? 

In this guide, we’ll help you answer these questions and more. We’re going to walk you step-by-step through building an Approval Process for your sales team that will help you maximize both the profitability and efficiency of your deals. 

Throughout this guide, we’ll reference the RevOps platform as our system was designed to bring procedure and automation to the Approvals Process. If you’d like to learn more about RevOps or see a demo of our Approvals Engine in action, please schedule a call with one of our Solutions Experts.

Step 1 Determine your Standard Deal

The easiest question to start with for approvals is “What is the baseline for a standard deal at your company?". For example:

  • Term Length: 12 months
  • Annual Contract Value: at least $10,000
  • Total Discounts: Less than 10%
  • Payment terms: NET 30
  • Billing Frequency: Annual
  • Marketing Permissions: Included
  • Auto-Renewal: Included
  • No changes or redlines to the standard terms or MSA

Step 2 Approvals for Standard Deals Deal

Now ask yourself, if a rep had a deal like this ready to go, would a manager or someone on the team need to approve it before the rep could share it? Or could this deal auto-approve via RevOps and be shared immediately?

Keep in mind, applying approval processes to standard deals increases visibility and control within the deal making process but decreases deal velocity. It’s important to keep the pros and cons in mind when it comes to these types of decisions.

If you do decide that standard deals still need approval, then you’ll want to determine who needs to approve standard deals. Approvals can be individual-based (i.e. the CRO needs to approve all deals) or team-based (i.e. the Sales Director approves the Sales Team’s deals and the Renewals Manager approves the Customer Success Team’s deals).

Step 3 Approval Teams

When choosing who has to approve, RevOps has structured approval workflows around teams. A team can vary depending on the organization structure and size. Some examples are:

  • NA Sales
  • EMEA Sales
  • Finance
  • Deal Desk
  • Legal
  • Customer Success
  • Solutions Engineering

While at some companies, a team might be a single person, we still recommend designing processes around teams rather than individuals. When approvals are designed around a single person, bottlenecks are bound to happen. That person might get busy or sick and unable to review an important deal promptly. Having multiple people on an approval team provides backup when those cases come up.

Step 4 Identify the Nonstandard

Once you've decide what a standard deal looks like, now you’ll want to determine what changes from the standard - i.e. the nonstandard - require special consideration. For example, changing the Payment Frequency from Annual to Monthly may require approval from your CFO.

For changes to specific areas of the contract - such as changes to a term value or inclusion/exclusion of a term - we recommend using RevOps approval topics. Each topic will be individually tagged so it is clear to the approver what changes are being flagged. A team may have multiple topics to approve.

Common Topics and Cases to Flag:

Topic When to Flag for Approval Approval Team/Individual
Billing Frequency Value is not Annual Finance Team
Payment Terms Value is not NET 30 Finance Team
Auto-Renewal Clause Excluded Sales Manager
Marketing Permissions Clause Excluded Marketing Manager
Term Length Value is less then 12 months Sales Manager
Early Termination Clause Included Legal Team
Product Commitment Clause Included Product Team
Professional Services Included Implementation Team
Subscription Product(s) Discount > 10% Sales Manager
Total Contract Value Discount > 10% Sales Manager
Total Contract Value Discount > 20% VP of Sales
Total Contract Value Discount > 30% CRO

In some cases, the Sales Rep may be able to make certain changes without additional approval, such as removing marketing permissions, but would be required to provide written justification. In these cases, approval topics can be assigned to the Sales Rep to provide justification and approve the topic themself.

For cases such as overall deal discounts, approvals may require multiple people. In the example from the table above, a 30% discount may require approval from the Sales Manager, then the VP of Sales, and then the CRO. RevOps approval topics support ordering multiple approval levels to protect the time of your executives and only flag items requiring their attention that have been reviewed by a lower level.

When using approval topics, multiple approvers can approve different sections of the deal. Final approval will occur whenever a single assigned approver approves the deal. The final approver will be notified in RevOps once all topics on the deal are approved.

Step 5 Install Best Practices associated with Communication During the Approval Process

The best place for all your communication to occur around the approval process is in RevOps collaboration mode. In collaboration mode, ad hoc approval topics can be manually created if an approver finds something that requires approval from someone new or at least a second set of eyes. Collaboration mode also lets users reply in threads, tag other users, and keep all of the conversation tied to a deal and even specific sections within a deal.

This is especially powerful for expansions and renewals. For example, when you’re reviewing the new business deal from 10 months ago in order to create the renewal agreement, you have all of the deal context in one place to understand what decisions were made and who approved them. There’s no need to go searching through various Slack messages, emails, and texts to see why something happened.

In the event that a conversation does happen outside of collaboration mode, we recommend adding a comment during the approval process to connect the two stories.

Designing an approvals process is only half the battle. In order for it to be effective, the rules and guidelines need to be enforced. With the platform, you can define and customize approval stages, establish criteria for each stage, automate notifications, and ensure seamless collaboration between various stakeholders. If you'd like to learn more about and how other businesses have built their structured and scalable approvals processes, please schedule a call with one of our Solutions Experts. Let's celebrate every sale!
Sr. Account Manager

Dan Veres

Dan works with both new and existing customers. As someone in sales, he only wishes he knew about RevOps in previous jobs. You can find Dan hiking, reading, or enjoying life's finer things in his free time.

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