It doesn’t matter if you are an entrepreneur or a legal associate, there is one set of documents that make regular visits to your desk — the contract. Whether you are raising funds from investors, or onboarding clients, or simply hiring new staff, every activity you undertake as part of your business needs to be supplemented by a contract.
In a nutshell, a contract serves as a record of commitment between two or more parties. This document defines the rights and obligations of the participants and also lists out the consequences in case of noncompliance.
Yet surprisingly, despite its significance, the attitude of companies towards contract management has been overwhelmingly lethargic. Even today, it is common to see companies use outdated methods such as never-ending email threads or long paper trails to effectively manage their contracts. However, this practice invites mayhem in the form of misplaced documents, missed deadlines, and unwarranted exposure to liability.
Fortunately, there is a rather simple and efficient digital solution to this traditional problem. By utilizing contract management software, a company can easily tackle its documentation woes, minimize risk, and rid itself of legal hassles.
What is a Contract Management Software?
A contract management software enables businesses to digitize and automate the entire contract lifecycle by unifying all allied activities onto a single platform. The activities include:
- Create: Generate a contract from scratch
- Edit: Proofread or enhance contracts
- Collaborate: Coordinate with other users
- Review: Analyze the contracts for any loopholes
- Store: Safely record the contract for future references
- Distribute: Share the contract with other users or counterparties
- Execute: Sign off the contract and put it into action
- Monitor: Track the health of the contract in terms of renewal or expiry
- Secure: Protect contracts against loss or damage
The benefits of contract management software are many. It helps organizations to reduce timelines, improve productivity, and save big on costs. Additionally, this software also assists different departments within the organization, including legal operations, sales, human resources, and more, by allowing them to streamline operations.
Today, the market possesses multiple contract management solutions, each providing an edge over the other. Therefore, it is important to pick the right contract management system that fulfills the requirements of your organization and helps you to take your business to the next level.
How to Select a Contract Management Software?
To make your task simpler, we have compiled a small checklist that highlights the top qualities of a great contract management solution. A good contract management software should have the following assets.
User-Friendly
A well-designed platform goes a long way in improving the adoption of the software among employees. Select software that provides tools that can be operated with convenience and that encourages collaboration among teams. The platform should also offer templates that can be modified and executed with minimal effort thereby improving productivity.
Interoperable
Another element to look out for is how well the software can be integrated with other existing tools utilized by the organization. This step ensures that there is a seamless exchange of information between the contract management software and the organization’s CPQ, ERP, and CRM systems. It also makes the platform scalable as new third-party integrations can be introduced in the future.
Accessible
In the age of remote working, it is important to select a platform that is online and optimized for an array of devices. Opt for a cloud-based contract management solution that stores documents on a centralized repository. This allows teams to quickly summon records on the platform from any device or location with relative ease.
Data-driven
Big Data is playing a significant role in the decision-making processes of businesses. A platform with an integrated data analytics tool will help highlight trends and prompt actionable insights in the document lifecycle. This enables the organization to optimize operations and reduce costs.
Intelligent
An AI-powered contract management software will support your business to automate tasks and eliminate human errors. The feature will prove indispensable to your team as it will assist in reviewing and processing higher volumes of contracts with greater speed and accuracy. This way, you can prevent risks, such as lapses, delays, etc., and identify opportunities, like renewals, enhancements, etc., throughout your contract lifecycle.
SpotDraft offers all of the contract management features listed above as well as a variety of other valuable services. With a native in-line editor, it is now easier to revise contracts on the go. Likewise, a robust AI protocol delivers intelligent feedback based on the parameters you provide. Finally, an abundance of templates enables your team to draft and execute contracts swiftly.
At the end of the day, all business relationships begin and end with an agreement. A software that organizes the many activities in the contract lifecycle helps bring precision and consistency to the documentation process. By leveraging the services of contract management software, organizations can mitigate their risks and simplify operations.
Also read: 8 Top Contract Management Software Platforms
Curious about how SpotDraft helps enterprises manage their contracts better? Check out the features page to learn more!
Benefits of contract management software for your business
Contract management software make contract lifecycle management efficient, quick, and transparent. Being cloud-based, these solutions help organization improve their contract drafting, editing, and reviewing practices.
As a bonus, they offer real-time insights into contract management, making it easy for legal counsel to demonstrate the value of their work.
Beyond these primary benefits, contract management software offers several other notable advantages.
Manage large volumes with secure contract repository
Contract management software provides a cloud-based secure contract storage that allows you to draft, manage, and organize various contracts in one central location. It means no more sifting through stacks of documents or complex contract management spreadsheets to find the right contract.
This unified contract storage offers several advantages:
- Enhanced security with end-to-end encryption
- Quick access to documents in case of disputes or litigation
- Version control and change tracking for easy revisions
“We are able to draft and redline contracts inside the CLM tool. Therefore, we no longer need to rely exclusively on tools such as MS Word and Google Docs. Now, all stakeholders can view and access just one true version of the contract.” ~
Igor Poroger, Director of Legal, EMEA, Vectra AI
How CLMs Empower Legal Teams in B2B SaaS Companies
Reduce manual workload by automating tasks
CLM software significantly reduces time spent on repetitive tasks through built-in automation. For example, you can set up triggers and predefined conditions to:
- Send contracts for approval when they meet specific criteria, e.g., contract value over a certain amount.
- Set up an automated follow-up email sequence after a certain time of no action.
- Adjust clauses based on predefined variables, ensuring flexibility and accuracy.
This automation not only saves time but also reduces the constant back-and-forth between stakeholders. Nadia Louis Hermez, Legal Operations Manager at Next Insurance, Inc., shares her experience:
“Now everybody knows no contract can be signed or executed without going through our CLM tool, and every stakeholder has clarity on where the contract is in the pipeline.”
Nadia Louis Hermez, Legal Operations Manager of Next Insurance, Inc
The Counsel Corner, Building a Robust Legal Ops Function
Reduce contract approval time
By centralizing contract management, CLM software dramatically reduces contract approval times.
For instance, instead of manually searching for and sending contracts, the sales team can raise approval requests directly within the system. The HR team can raise approval requests for new hire’s onboarding without much hassle.
Such streamlines process
- Eliminates time delays caused by manual document handling
- Provides instant access to contracts for all authorized parties
- Enhances transparency in lawful compliance and terms
Improve team collaboration and transparency
Contract management software brings all teams together to standardize and manage contracts on a single platform, fostering collaboration and transparency across departments.
Such ease of collaboration happens as you get access to a series of native features including:
- Permission access controls for information security
- Real-time commenting helps you collect stakeholder’s input and make necessary changes.
- Real-time tracking of contract statuses to monitor a number of contracts drafted, sent, or signed.
- Integrated e-signatures to keep track of signed contracts, send follow-up reminders, and assess the number of contracts signed.
Who can benefit from free contract management software?
Contract management software benefits various departments and businesses of different sizes, not just in-house counsel. For example, finance and HR departments can also leverage these tools.
Let's explore how different users can benefit from implementing a contract management system.
Legal professionals
For in-house counsel,CLM software is a game-changer.
It enables them to maintain standardized guidelines across all contracts, reducing compliance risks. By automating routine tasks such as follow-up reminders, corporate lawyers can focus on high-value work while maintaining visibility into contract statuses, expiration dates commercial terms, and obligations.
With such a proactive approach to the contract management process, the legal team ensures a faster contract approval process and meets all contractual obligations promptly.
Sales teams
Sales professionals can collaborate easily with legal teams and accelerate their deal closure rates. For instance, legal teams can set up templates for frequently used contracts such as NDAs, MSAs, and other sales agreements, enabling sales teams to send out compliant contracts quickly.
Built-in e-signature features simplify the signing process as the sales team can keep track of contracts signed and send follow-up reminders.
Moreover, the contract analytics dashboard provides valuable insights into contract trends, allowing sales teams to identify which types of contracts close faster and make data-driven decisions to optimize their sales strategy.
Solopreneurs and agencies
For independent professionals and small agencies, contract management software offers a professional edge.
It helps organize client interactions, ensures legally sound contracts, and automates follow-ups. By centralizing all contract-related activities, solopreneurs can present a more organized and efficient face to clients while saving valuable time on administrative tasks.
Also read: What is an Independent Contractor Agreement? (+ Free Template)
Small business owners
Small business owners juggle numerous responsibilities, and contract management often falls by the wayside.
CLM software allows them to create legally binding contracts at scale for vendors and employees alike. By automating the drafting, management, and analysis of contracts, small business owners can redirect their focus to core business growth activities while maintaining robust statutory protections.
Also read: Contract Management for Small Businesses: The Ultimate Guide
Procurement teams
Procurement teams get more visibility into contracts sent to vendors to build more transparent contract processes. Through auto-renewal reminders, stakeholders can stay alert on upcoming expiration dates to avoid the risk of renewing an ended contract.
With tamper-proof audit trails, procurement teams can track the contract execution process get visibility into past negotiation of contract terms, and identify any clause that might misalign with the new policies.
Finance teams
With reliable contract management software, the finance team can project financial inflows and outflows from the deal closed by the sales team. It helps with budgeting and ensuring there is consistent revenue generated to meet the business’s goals.
Through analytics dashboards, the finance team can also analyze the contract that needs to be paid out to various vendors in the next few months.
Human resources
HR departments benefit greatly from CLM software in managing employee employment contracts and policy acknowledgments. It ensures compliance with legal and regulatory requirements, reducing the risk of disputes. The software streamlines onboarding processes by automating document flows, such as sending welcome packages upon contract signature.
Additionally, HR can easily retrieve and manage employee contracts from a centralized repository, simplifying audits and employee record management.
Real-world use cases of contract management software for businesses
From streamlining contract storage to reducing compliance risks, contract management software offers a suite of use cases across organizations.
Here are three of the best real-life examples and their impactful outcomes.
Headout: Building a transparent audit trail
Headout, a New York-based company specializing in curated travel experiences, faced the challenge of maintaining a clear audit trail. The sheer volume of vendor onboarding made it difficult to track the compliance and legality of signed contracts.
Headout implemented SpotDraft's Clickthrough feature, which improved its audit trail transparency. This solution provided the in-house counsel with:
- Detailed visibility into signature events, including time, date, email ID, and IP address
- Enhanced ability to maintain compliance across all agreements
- A more structured and organized approach to contract management
The Clickthrough feature proved invaluable for Headout, allowing them to scale their operations while maintaining rigorous legal standards.
Also read: Clickwrap Agreements: The Ultimate Guide
Public US university: Built a centralized contract repository
A prominent U.S. public university struggled with a common yet critical issue—contracts were scattered across various platforms and locations, often saved with unsearchable terms. Such disorder led to huge time waste and potential oversight of important contractual obligations.
The university's solution was to adopt SpotDraft's contract data management software to build a centralized contract database in the following ways:
- Central storage: The team consolidated all contracts into a single, accessible location, simplifying tracking and management.
- Searchable repository: Advanced search filters enabled the legal team to quickly locate contracts based on filters such as last modification date, type, or expiration date.
- Enhanced stakeholder collaboration: The centralized system boosted cooperation across departments—athletics, HR, coaches, and the offices of the Provost, President, and International Affairs.
A paralegal at the university highlighted the practical benefits of this new system:
"I ran into someone at the International Affairs office, he wanted to find out which schools across the world we had agreements with. SpotDraft enabled us to share this information within minutes. This ensures that efforts are not duplicated and we don't create partnerships with schools we already have contracts with." ~ A paralegal at the university
3. Urban Vault: Sending contracts for e-signatures globally
UrbanVault, a leading provider of managed office spaces in India, faced challenges with its traditional contract negotiations and signing processes. Relying on real stamp papers, in-person signings, and manual contract management led to lengthy deal closing times, limited transparency, and difficulties in tracking contract statuses.
By implementing SpotDraft's built-in e-signature feature, UrbanVault achieved remarkable improvements:
- Reduced deal closing time from weeks to under an hour—an astonishing 95% increase in turnaround time
- Enabled global contract signing without requiring a physical presence
- Improved tracking of contract statuses and stakeholder involvement in closed deals
Arti Singh from UrbanVault's Founder's Office emphasized the transformative impact:
"Getting signatures on time was a big challenge because stakeholders had to be present in the same room. However, with SpotDraft, contracts can be e-signed from anywhere in the world in a matter of minutes." ~ Arti Singh, Founder's Office, Urban Vaults
Also read: A Quick Intro to eSignatures
SpotDraft: End-to-end contract management software
A high-quality contract management software positively impacts every aspect of your contract lifecycle management, from drafting to performance tracking. SpotDraft offers end-to-end contract management with features including:
- Automated workflows: Build trigger-based automation to reduce time spent on repetitive tasks.
- Pre-built clause library: Draft contracts at scale and convert them into pre-approved templates for different teams to edit and send.
- Document collaboration: Invite stakeholders by managing permissions based on their roles to ensure security and transparency across contract management.
- Contract drafting and editing: Write and edit contracts within SpotDraft and invite team members to leave comments.
To know more about our offerings contact us today!
