What is Contract Management software?

Contract management software makes handling contracts easier and more efficient. It helps create, negotiate, sign, store, and renew contracts.

Overview

Challenges

Features

Benefits

Beneficiaries

Role

Why CLM 365

How Does Contract Management Software Works in Business

It is a powerful tool designed to enhance the efficiency of businesses. Here is how it works.

1) Contract Request and Initiation

The process begins when a need for a new contract is identified, such as forming a new vendor relationship, entering a partnership, or onboarding an employee. Departments like legal, procurement, HR, or finance submit the request for a new contract.

The contract lifecycle management software captures the essential details, such as contract type, parties involved, terms, and other specific requirements.

2) Contract Creation and Drafting

Once the contract request is received, the software provides access to customizable contract templates tailored to various contract types (e.g., vendor agreements, employee contracts, NDAs). These templates contain standard clauses and legally compliant language.

The contract is then drafted by filling in specific details relevant to the business need. Many contract management platforms also suggest standard clauses based on the type of contract, ensuring nothing essential is missed.

3) Internal Review and Collaboration

After drafting, the contract enters the internal review stage, where multiple departments collaborate to contract meets legal, financial, and business standards. The software facilitates real-time collaboration, enabling teams to comment, suggest edits, and track changes.

Version control verifies that every modification is logged, and previous versions can be reviewed if necessary, ensuring clarity and consistency throughout the process.

4) Approval Workflow

Once the contract is reviewed and all necessary changes have been made, the software automates the approval process by routing the contract to relevant stakeholders for their sign-off.

The software makes the contract moves through the approval chain with minimal manual intervention, and automatic notifications alert each party when their approval is needed. Approval tracking within the software provides visibility into who has approved, who is still pending, and what changes are outstanding, reducing delays.

5) Contract Execution and Signing

After the final approval, the contract is ready for execution. The contract management software often integrates with electronic signature tools, enabling signatories to review and sign the contract digitally. This eliminates the need for physical signatures and speeds up the finalization process.

6) Centralized Storage and Secure Access

Once signed, the contract is stored in a centralized, secure digital repository within the software. All documents are stored in a structured, easily searchable manner, making it simple to retrieve contracts whenever needed for audits, compliance checks, or business operations.

Role-based access makes sure that sensitive contracts are only accessible to authorized individuals, enhancing security and compliance.

7) Tracking and Reminders for Key Dates

Contract software automatically tracks important contract milestones, such as renewals, expirations, and performance reviews. It sends timely reminders to the relevant stakeholders to confirm that no critical deadlines are missed.

This feature helps businesses stay proactive about contract renewals and renegotiations, ensuring they never lose out on opportunities or miss important deadlines.

8) Renewal and Amendments

As contract manager software approach expiration or renewal dates, it will send out automated reminders, allowing businesses to initiate renewal discussions or amendments well in advance.

It also helps businesses track any amendments or extensions made to the original contract. Making sure that any updates are documented and that both parties are aware of the new terms.

What are the Challenges of Contract Management?

1) Missed Renewal and Expiry Dates

Businesses used to miss renewal dates and important contract deadlines. This can lead to the automatic renewal of contracts under unfavourable terms or missed opportunities to renegotiate.

In some cases, businesses may be stuck with contracts that no longer align with their current needs, resulting in unnecessary costs or services that are obsolete. The risk of unknowingly allowing a contract to expire or auto-renew without review can be costly, especially when dealing with high-value agreements or key partnerships.

2) Inefficient and Slow Approval Processes

In the absence of a digital solution, the contract approval process can become disjointed, slow, and prone to bottlenecks.

Delays in obtaining approvals from relevant parties can drag down timelines, hinder decision-making, and cause frustration among teams, slowing down business operations.

3) Risk Of Manual Errors

Managing your contracts manually increases the likelihood of human errors, such as incorrect terms, missed clauses, or overlooked deadlines.

These errors can lead to costly legal disputes, compliance violations, or missed opportunities, potentially damaging the company’s reputation and bottom line.

4) Lack of Centralized Tracking

Without a centralized system for handling contracts, businesses lose sight of important contract milestones such as renewal dates, obligations, or key performance metrics.

This lack of visibility makes it harder to track and manage the lifecycle of contracts, leading to missed deadlines, overlooked clauses, and a general loss of control.

This can result in costly errors and lost opportunities, particularly when critical contracts expire or are automatically renewed without proper review.

5) Compliance Risks and Legal Challenges

Compliance with evolving laws and regulations becomes more challenging without an automated system to track and monitor contract terms. Businesses can inadvertently violate industry regulations, leading to costly penalties, legal disputes.

6) High Risk of Non-Compliance

Keeping track of ever-changing regulations and compliance requirements can be a challenge, especially without a contract management software that automatically updates and monitors compliance needs.

Businesses that do not have an automated way to track contract compliance may unknowingly violate industry laws, regulations, or internal policies. This could lead to costly legal consequences, fines, or reputational damage. Compliance issues are often hard to identify without proper visibility into contract terms and timelines.

7) Cyber Security Breaches

Poor contract management exposes businesses to data security risks when sensitive documents are shared without proper protection. For instance, legal contracts should stay within the legal department, while procurement agreements must remain with the procurement team.

A secure contract management software with role-based access confirms that only authorized personnel can view or edit these documents, preventing breaches and protecting the business from legal issues.

Notable Features of Contract Management Software

A Performance Management System (PMS) helps organizations track, evaluate, and enhance employee performance, aligning individual efforts with company goals. It optimizes workforce efficiency, improves engagement, and fosters a culture of growth and accountability.

1) Contract Storage

A central storage system for contracts with easy-to-use search and organization features that help users find specific documents quickly.

This system helps businesses manage a full collection of contracts, allowing them to retrieve documents with ease.

By offering search and categorization options, users can filter through contracts by factors such as type, client name, value, or end date.

This simplifies finding contracts, removing the hassle of going through paper files or multiple folders.

2) Contract Drafting and Formulation

This feature simplifies the contract creation process by offering businesses access to pre-designed templates, complete with standardized clauses and terms.

These templates are crafted to suit various contract types, ensuring businesses don not need to start from scratch each time they need an agreement.

By utilizing these pre-built templates, organizations can maintain consistency across all contracts, ensuring that each agreement adheres to company standards. This approach not only guarantees greater accuracy but also helps save time and effort, allowing teams to focus on other important tasks instead of reinventing the wheel with every new contract.

3) Internal Team Collaboration and Approval Flow

This feature provides tools for easy collaboration on contracts, allowing both internal teams and external partners to work together smoothly. It also helps define clear approval processes, ensuring contracts are reviewed and approved by the right people.

A major benefit is the ability to set up automated approval workflows. Organizations can define approval paths based on roles, departments, or levels, ensuring the contract goes to the right individuals at each stage.

By automating this process, businesses can reduce delays and bottlenecks, speeding up approval times and improving overall efficiency.

4) E-Signature

It integrates with electronic signature platforms, allowing contracts to be signed digitally and eliminating the need for manual signatures and paper-based processes.

Digital signing enables businesses to speed up contract execution and reduce administrative work. This integration improves efficiency, reduces delays, and enhances overall productivity.

5) Contract Negotiation and Reviewing

This feature offers tools to track changes and revisions in contracts during the negotiation process, with version control to manage different versions.

Stakeholders can easily review contracts, suggest edits, and track revisions in an organized manner. The ability to redline contracts highlights proposed changes directly in the text, making the review process clear and transparent for everyone involved.

This ensures all changes are documented, reducing confusion and helping align all parties before final approval.

6) Monitor Contracts With Ease

Contract management software provides dashboards and reporting tools to monitor the status of contracts throughout their entire lifecycle, tracking important milestones, deadlines, and obligations.

It helps organizations stay organized by keeping track of critical contract events, ensuring timely management and adherence to compliance requirements. Automated reminders and notifications for key events like contract renewals, expiration dates, and milestone payments are included, allowing teams to stay ahead of important deadlines without missing any key actions.

7) Compliance and Risk Management

To maintain legal and regulatory compliance, businesses require tools that monitor and mitigate potential risks within contracts. These tools play a vital role in ensuring that all contracts adhere to necessary legal standards while preventing any associated risks.

By integrating risk monitoring throughout the contract lifecycle, organizations can identify compliance gaps and assess risks early. This proactive approach helps businesses stay ahead of regulatory changes, address legal issues, and reduce penalties.

Such capabilities empower businesses to navigate complex legal landscapes with confidence, ensuring every contract remains in line with required standards.

8) Contract Renewals and Expiry Management

Automated reminders and notifications help businesses stay ahead of contract renewals and expirations, ensuring timely actions are taken for both.

By setting up alerts for approaching contract end dates, organizations can proactively monitor contracts and avoid last-minute rushes. This allows them to initiate renewal negotiations or begin termination processes seamlessly when necessary.

9) Tracking History and Audit Trails

Each action and update made to contracts is thoroughly recorded, a complete history of all changes for accountability and compliance.

It empowers businesses by offering a transparent view of contract management. It tracks every edit, approval, and revision, ensuring that all contract-related activities are documented.

This level of tracking is crucial for maintaining compliance and accountability throughout the contract process.

10) Integration with Existing Office Applications

It integrates with other business systems like Outlook, MS Teams and SharePoint to synchronize contract data across platforms. This integration makes sure that contract management is done smoothly.

This connection builds processes, improves collaboration, and enhances decision-making, making contract management more efficient and cohesive across the organization.

11) Advanced Reporting Analytics

Contract management system software provides robust tools for generating detailed reports and analysing key contract data, including performance, compliance, and financial impact.

Users can create customizable reports tailored to specific metrics such as contract value, renewal rates, and vendor performance. This flexibility enables businesses to focus on the most relevant data, optimize contract processes, and make informed decisions to maximize growth and reduce risks.

12) AI features

A AI equipped contract software generates detailed clause summaries, offering updated and relevant clause suggestions based on industry regulations and company policies, and recommending alternative clauses written in clear and concise language.

These features validate the contracts are accurate, compliant, and easy to understand, improving efficiency and reducing risks throughout the contract lifecycle.

What are the Benefits of Contract Management Software?

It simplifies contract processes, guarantee compliance, minimizes risks, organizes storage, improves collaboration, and delivers insights to enhance efficiency and decision-making.

1) Improved Collaboration Across Teams

A comprehensive contract software provides a centralized platform where all stakeholders, both internal and external, can easily share documents, track contract changes, and discuss terms.

This approach fosters better coordination and ensures that everyone remains aligned, boosting transparency and preventing miscommunication throughout the contract’s lifespan.

2) Mitigating Legal and Operational Risks

By offering tools to monitor deadlines, manage contract clauses, and oversee revisions, of managing a contract can significantly reduce the chances of falling short on legal or regulatory compliance.

This proactive approach minimizes the risk of costly penalties, legal conflicts, and other issues tied to inadequate contract oversight.

3) Gaining Full Control and Insights

Advanced reporting and analytics features provide businesses with in-depth insights into their contract performance.

By tracking key metrics and identifying areas for improvement, organizations can optimize their contract strategies, make data-driven decisions, and maintain tight control over their portfolio.

4) Maximized Efficiency and Reducing Costs

With automated workflows, a contract management system helps organizations reduce time-consuming tasks, cut down on errors, and boost overall efficiency.

Improved contract negotiations, vendor relationships, and terms management lead to significant cost savings through fewer disputes and better contract outcomes.

5) Ensuring Data Protection and Compliance

Security features like access controls, encryption, and audit trail checks ensure that contract data remains safe and compliant with privacy regulations. These features protect sensitive information, enhance the integrity of the contract process, and reduce the risk of data breaches, ensuring both confidentiality and trust.

Identifying skill gaps: The software helps L&D teams identify where employees need additional training or development.

Tracking learning progress: Monitoring whether employees are engaging with training programs and achieving the desired outcomes.

Creating personalized learning paths: Based on performance data, L&D teams can tailor training programs to address individual employee needs.

6) Simplified Legal Review

Contract software management allows legal team to easily access and review contracts, ensuring that all terms and clauses align with company policies and regulatory requirements.

With the ability to automate tracking and receive timely alerts, legal teams can identify and address potential risks before they escalate, providing proactive protection for the organization.

Additionally, detailed audit trails and compliance reports offer full transparency, making it easier to track changes, revisions, and approvals. This ensures that all contracts are legally sound, and that the organization is always prepared for audits or legal inquiries.

7) Centralized Contract Storage and Renewal Management

Having good software for contract management helps procurement teams to manage contracts more efficiently by providing real-time tracking of contract terms and supplier performance.

This enables better negotiation of favourable terms, improving vendor relationships and overall procurement effectiveness. A centralized contract repository makes it simple for teams to access and review contracts, reducing the risk of missing important agreements.

Who Benefits from Contract Software Management?

1) Legal

Contract management software streamlines contract creation, storage, and revision tracking, saving time for legal teams.
It enables legal professionals to quickly identify changes, enforce compliance, and reduce risks from outdated or unapproved terms.
By centralizing all legal agreements, contract management software ensures compliance with the latest regulations and prevents important details from being overlooked.

2) Procurement

Contract lifecycle management software centralizes all supplier and vendor contracts, ensuring easy access to relevant documents.
Automated reminders for contract renewals help procurement teams stay on top of key deadlines and avoid missed opportunities.
Track key performance indicators to monitor contract performance and ensure compliance with agreed terms.
Optimize procurement agreements for cost-effectiveness and efficiency, minimizing risks associated with non-compliance or missed deadlines.

3) Sales

Automate the creation of standardized sales contracts with contract software, speeding up approval workflows and reducing administrative tasks.
Free up sales professionals to focus on client interactions and closing deals, making the sales process faster and more efficient.
Ensure contracts reflect the most up-to-date terms, preventing misunderstandings and maintaining clarity with clients.

4) Finance

Contract software management provides visibility into financial obligations, including payment schedules, renewals, and penalties.
Tracks important dates and terms, ensuring deadlines are met and financial commitments are adhered to.
Automated alerts for payments or audits reduce errors and maintain financial compliance.
Clear access to contracts enables better cash flow management, budgeting, and compliance.

5) HR Teams

Automate the creation and management of employment contracts, ensuring compliance with labour laws and organizational policies using contract management system software.
Simplify tracking of contract renewals, amendments, and terminations, keeping employee agreements accurate and up to date.
Streamline onboarding with clear, legally binding terms while reducing administrative burden for HR teams.
Enable seamless collaboration across legal, procurement, sales, finance, and HR teams to reduce risks, maintain compliance, and save time organization-wide.

How Contract Management System Software Builds Trust with Businesses.

1) Transparency in Contract Processes

It centralizes all contract-related documents in a single, accessible platform. This allows all stakeholders, both internal and external, to view, track, and review contracts in real-time.

With a transparent system, everyone involved has access to the same up-to-date information, minimizing the potential for misunderstandings or misinformation. This fosters trust, as business partners can feel confident that no vital details are being hidden or miscommunicated.

2) Consistency and Accuracy:

Contract manager software helps every contract follows the same set of predefined templates and standard clauses. By eliminating inconsistencies, businesses can rest assured that every agreement is aligned with their policies and objectives.

This reduces errors and ambiguity in contract language, building trust with clients and partners, as they can rely on the software to generate contracts that meet legal and operational standards without the risk of misinterpretation.

3) Efficient Communication

With integrated communication tools, contract software management enables real-time collaboration on contract creation and revisions. Stakeholders can leave comments, propose changes, and discuss terms within the system, keeping all correspondence organized.

This improved communication helps all parties are on the same page and that issues can be resolved quickly.

By organizing collaboration, businesses can avoid the frustrations of lengthy back-and-forth exchanges, building stronger relationships and greater trust with partners.

4) Timely Alerts and Reminders

It automatically sends reminders for key contract milestones, such as renewals, expiration dates, and payment deadlines. This proactive approach is critical deadlines are missed and that all parties are aware of important events in the contract lifecycle.

With these timely notifications, businesses can manage contracts efficiently and fulfil their contract obligations without delay, demonstrating responsibility and reliability, which are key to maintaining trust in business relationships.

5) Efficient Issue Resolution and Clarity

Contract software management helps in transparency and clarity throughout the entire contract lifecycle by maintaining a detailed audit trail of all activities, including edits, approvals, communications, and revisions.

This organized and accessible record enables businesses to swiftly address any concerns or misunderstandings that may arise.

With clear documentation in place, all parties can feel confident that any issues will be resolved quickly and fairly, fostering trust and promoting smoother collaboration throughout the partnership.

Why CLM 365 is the Top Choice for Contract Management

1) Built on Microsoft Eco-System for Ultimate Security

CLM 365 is built on the Microsoft ecosystem, ensuring that you benefits from the highest levels of security available.

As Microsoft continuously updates its security protocols, your business can rest assured that all sensitive contract data remains protected, safeguarded by world-class encryption and advanced security measures inherent in the Microsoft environment. It is Microsoft certified apps.

2) AI-Powered Features for Enhanced Efficiency

It leverages the power of Artificial Intelligence (AI) to transform your contract management process. The software automatically suggests updated clause templates, offers alternative clause recommendations, and provides industry-specific summaries tailored to your needs.

Furthermore, AI helps track key obligations, ensuring that important contract milestones are never missed and making your contract lifecycle smoother and more efficient.

3) User-Friendly Interface with Fluent UI

Contract manager software has user friendly interface built on Microsoft Fluent UI, which provides a sleek, responsive, and seamless user experience.

Designed with simplicity in mind, Fluent UI allows new users to quickly adapt and start using the platform with minimal training. Its intuitive design makes it easy to navigate through contract processes, improving productivity and minimizing the time spent on training.

4) Seamless Integration with Power Apps and SharePoint

It integrates smoothly with Power Apps and SharePoint, allowing you to effortlessly manage and automate your contracts within your existing Microsoft environment.

Whether it is building customized applications for contract workflows or utilizing SharePoint document management capabilities, this integration supports your contract data is always accessible, shareable, and in sync across all platforms, making collaboration and contract tracking more efficient.

5) Scalable Support for Growing Organizations

CLM 365 is designed to grow with your business. Whether you are a small team or a global enterprise, the software offers scalability that adapts to your evolving needs. As your organization expands, it provides continuous support, ensuring that new users, larger contract volumes, and more complex workflows are seamlessly managed without compromising on performance or usability.

Conclusion

Adopting SharePoint contract management is a game-changer for businesses seeking to simplify their contract lifecycle, enhance efficiency, and reduce risks. It provides a comprehensive solution that empowers organizations to manage contracts with precision, from creation to renewal.

With features like AI, automation, secure storage, and real-time tracking, this software is essential for companies aiming to stay organized and compliant. Investing in top-tier contract management software not only saves time but also strengthens business relationships and builds long-term success.

Looking to revamp your contract management process. Schedule a free demo. Our demo specialist is happy to assist you

Frequently Asked Questions

Does CLM 365 offer a knowledge base to learn about its product features?

Yes, CLM 365 provides a comprehensive knowledge base where users can learn about product features and navigation. This resource empowers users to find answers independently, saving time and reducing the need to rely on customer support.

How do I get started with contract management software, and what are the steps?

Define Objectives: Identify your specific needs, such as speeding up reviews, ensuring compliance, or minimizing errors.
Assess Current Processes: Review your existing contract workflows to understand inefficiencies and areas for improvement.
Engage Key Stakeholders: Involve legal, procurement, and compliance teams to gather input on must-have features.
Plan Budget and ROI: Consider costs, including licensing and training, and evaluate how the software will save time and resources.
Select the right solution: Look out for contract management software that offers robust features that minimizes the legal risks, high-end data secured and boost productivity in the business

To Whom Does CLM 365 sends automated alerts before renewal?

It ends automated alerts to contract managers, legal teams, or designated users responsible for managing contracts before a renewal is due. These alerts help ensure timely renewal actions and avoid missed deadlines, keeping all relevant stakeholders informed.

Can SharePoint Contract Management Software connect with other business tools?

Yes, SharePoint Contract Management Software integrates with Microsoft apps like Outlook and Power Automate, SharePoint enabling smooth data exchange and workflow automation.

Is the contract software management suitable for small businesses?

Yes, contract software management is suitable for small businesses. It helps contract processes, reduce errors, and improve efficiency, making it a valuable tool for businesses looking to manage contracts effectively as they grow.