So you’ve decided to enable your team by introducing a contract management system. Fantastic! According to a survey by World Commerce & Contracting, poor contract management on an average causes businesses a loss of 9.2% of their annual income – and even higher for larger companies. A CLM tool will certainly help you navigate the pitfalls of modern contract management.

But now that you’re evaluating different solutions, what should you look at? There are a myriad of options available in the market today, and choosing the right one for your organization is not a simple matter of picking between the top 3 solutions anymore. The best way to evaluate a potential solution is to compare it against your list of necessary and ideal features.

If you feel lost, don’t worry. We’ve made a comprehensive checklist of essential contract management software features that you can use to evaluate various CLM options and choose the one that’s right for your team.

How to use this checklist of must-have CLM features

We’ve divided this list into 9 different categories of features you should typically look for when evaluating CLM solutions. Each category includes specific features that different contract management systems offer. You can use this checklist to decide where your contract lifecycle management priorities lie, and sort the features you need based on those priorities.

For instance, if you’re primarily looking for a solution that allows you to keep a track of all your executed contracts and their status, then you will probably want to prioritize features related to creating a contract repository. On the other hand, if you’re looking for an all-in-one solution that takes care of your end-to-end contracting process, then you will want to go through all the categories given below and pick through the various features given based on your team’s requirements.

Ready? Let’s begin.

Contract creation and standardization features

Do you have a few specific high-volume contracts that need to be templatized and standardized for quick and easy contract creation? Do you hate switching apps and need a contract editor within your CLM itself? Some essential contract creation features you might look for in a CLM include:

1. Self-serve and/or assisted template creation: The option to create and edit templates yourself with your CLM solution or ask the CLM provider to create them for you if you’d rather not deal with that yourself.
2. Template library and questionnaire-based contract builder: Store pre-approved templates for high-volume contracts in your CLM and enable business teams to automatically generate contracts through a questionnaire-based process.
3. Ability to create contracts within your CRM: Integrate your CLM with CRMs like Salesforce and Hubspot to generate contracts directly within the platform and avoid manual input.
4. In-browser contract editor to create and edit contracts: Create contracts, import third-party paper, and edit and collaborate to finalize agreements right within your CLM’s editor.
5. Clause library to store standard language and versions: Create a library storing all your standard clauses and their different versions for easy access and reference.
6. Dynamic clauses based on local/state/federal legislations: Automatically add clauses based on region or governing law according to selected entity or specified geography.
7. Standard definitions and its contextual display: Pull up definitions instantly, within the context of the contract you’re viewing, without having to manually search for it.
8. AI-based error identification: Check third-party paper or your own drafted contracts for errors and inconsistencies and cross-check definitions through an AI-assisted error identification process. 
9. Arithmetic calculators: Reduce the risk of human error by letting the CLM do the calculations for you directly within the editor.
10. Suggestions for strengthening contracts: Access playbooks of accepted language, approved clauses, etc., and get suggestions through AI.
11. Automated naming conventions: Naming contracts and versions is automated and standardized for easy searchability and version control.

Contract collaboration features

Are all your contract-related communications aligned in one place? To bring all stakeholders together and accelerate the contracting process, ensure that your CLM platform allows for:

1. Inviting stakeholders to workbench: Check if the platform offers a single secure location for stakeholders to comment/edit contracts.
2. User roles and access control: Keep access on a need to know basis and assign roles to control what part of the contract someone can edit.
3. Contract editor with clause library: An in-app, browser-native contract editor that lets you collaborate with stakeholders on the platform itself.
4. Separation of internal and external comments: Scoped commenting that allows for differentiating between notes for yourself, communication with your team, and comments for third parties.
5. Comparison of redlined versions of contracts: Advanced track changes and comparison feature to see what changes the other party had made.
6. Ability to highlight/review changes between versions: Easy comparison of versions to view what changes were made.
7. Automated version control: Automated naming and version creation upon edits or import of a new version of a contract.

Contract process & workflow automation features

Are regular and repeatable admin tasks intelligently automated? Ensure every part of the contracting process that can be automated is automated with guided workflows.

1. Template-based contract creation: Create contracts within minutes using pre-approved and standardized templates.
2. Approval workflows: Automatically find and notify approvers based on contract type, urgency, pricing threshold, etc.
3. Automated notifications and reminders: Set up notifications and reminders for contract events and tasks, such as renewals and expiry, follow-ups for approvals and e-signing, etc.
4. Automated updates when contracts are approved or rejected: Get notified about contract changes such as approval or rejection to keep track of contract status.
5. E-sign capabilities and integrations: Collect e-signatures through an in-built e-sign capability or integrations with tools such as HelloSign or Adobe Sign.
6. Email integrations to send contracts to counterparties: Integrate with email clients to send out emails with contracts directly within the CLM.
7. Mail merge to send contracts to multiple counterparties: Capability to send contracts to multiple counterparties at the same time.
8. Conditional approvals based on thresholds: Streamline the approval process by specifying thresholds for automated approval, beyond which additional approvals are required.
9. Auto-assigning review requests to team leads: Specify review requirements based on contract type or on an ad-hoc basis.
10. Auto-send contracts for signatures: Create workflows to allow for automated task notifications based on contract activity and automatically notify stakeholders once the contract is approved for signatures.
11. Auto-signing basic, standard contracts: Store e-signatures and set processes for automated e-signing for specific contracts.

Also read: 8 Top Contract Management Software Platforms

Task monitoring features

Do all stakeholders have access to the status of relevant contracts and the ability to monitor related tasks? To prevent contract leakage, ensure that your CLM platform has:

1. Notifications for auto-renewals or other contract events: Whether it’s an auto-renewing contract, expiry, or compliance breach, automatically notify all relevant stakeholders on time.
2. Alerts about price changes during auto-renewals: Gain visibility over automated actions and contract changes such as price increase after a renewal.
3. Reminder emails: Receive automated emails about contract expiry, renewals, tasks, and more.
4. Audit trails for change management: A clear audit trail for all changes made in the contract, assigned to the stakeholder making the change.
5. Task manager: A task or project manager that simplifies visibility over assigned tasks, allows for custom tasks, setting deadlines, etc.

Hi 👋! If you’re in the market for a CLM solution, we have a guide that will help you find the best fit for your organization (whether that’s SpotDraft or not!).

Download it here.

Contract centralization and accessibility features

Can all your stakeholders access the contracts they need instantly, from anywhere? To empower your remote teams to function independently and create a single source of truth for all contracts, check whether the CLM platform enables:

1. Unlimited storage for historical and active contracts: Create a repository of all your historical and active contracts as a single source of truth for all your legal papers.
2. Automatic migration capabilities leveraging APIs: Import PDF or MS Word contracts manually in bulk or use integrations to automatically migrate them. If you have paper-based contracts, verify how they are migrated for optimum use.
3. Integration with your tech stack: Connect your tech stack for higher efficiency and integrate with all the tools your team uses, such as CRM platforms, HR platforms, etc.
4. Auto-extract terms and metadata: AI-assisted extraction of critical terms and metadata to enable faster search and retrieval, such as counterparty name, type of contract, dates, pricing, etc.
5. Contract tagging and hierarchical relationships: Connect related contracts intelligently to paint a clear picture of the relationship.
6. Cloud-based access: Access your CLM anywhere, anytime, allowing your teams as well as counterparties to securely login wherever they are.
7. Easy searchability with natural language: Enable your team to get the information they need based on natural language search terms such as counterparty names, dates, clauses, etc.

Security and compliance features

Are your contracts stored in a secure location? To make sure that your contracts remain secure and compliant, see if your CLM platform allows for:

1. Access control for internal and external stakeholders: Allow access to view, comment, edit, or take action on contracts only to those you want to.
2. Regulatory compliance: Check if the CLM platform comes preloaded with compliance for regulations like GDPR and enables better tracking to stay on top of compliance requirements.
3. Data hosting: See where your data will be hosted and if that meets your local regulatory requirements. Also look for flexibility in the region where it’s hosted.
4. Enterprise-grade cloud security: Ask for security compliance measures to ensure your sensitive data is secure.
5. Audit trails: Automated tracking within audit trails to stay in the loop of every activity that happens on a contract.

Contract measurability and analytics features

Do you have well-defined KPIs for your legal team and contract management lifecycle? To make contracting data-driven, ensure that your CLM platform offers insights into your contract lifecycle and team performance.

1. Contract dashboards with summary views: Single-pane visibility into all your contracts, prioritized based on criticality, severity of issue, and urgency of action. For instance, visibility over all contracts up for renewal in one place.
2. Productivity dashboards: Treat contract management as a business-critical function with insights on KPIs such as number of contracts closed monthly, turnaround time to execute different contract types, etc.
3. Custom reporting capabilities: Quickly create custom reports on the basis of contract type, status, dates, users, tags, etc.
4. Bottleneck identification and suggestions: Identify issues and inefficiencies within your contract processes and get suggestions for how you can improve them for greater productivity.
5. Due diligence dashboards: Monitor and analyze risks associated with various contracts or processes to make accurate forecasts.
6. Customization capabilities for recurring reports: Create recurring reports to track important KPIs for individual users, teams, and your contract lifecycle processes.
7. Diverse out-of-the-box visualizations: Understand analytics and create reports with effective data visualization capabilities.

Contract adaptability features

Is your contract management process simple enough to adapt to the evolving needs of your business? To ensure that your contracts can change with the way your business evolves, evaluate your CLM on adaptability.

1. Bespoke changes to templates: Easily update templates with new language, fix errors, and keep them up to date without having to contact support.
2. Org-wide changes to new contracts: Make org-wide updates when situations change. For instance, all new contracts should automatically have your new registered address.
3. API-driven integrations: Integrate with both your existing and new tech stack to allow ease in transfer of information between all the tools your team uses.
4. Scalability to power business growth: A pricing model and supportive team to help you scale your CLM system alongside your business, without breaking the bank. 

CLM implementation and support features

It’s important to note that all the features mentioned above would be moot point if your CLM is not implemented properly and if you can’t get premium support whenever you need help. Who is taking accountability for making sure your CLM works the way you need it to?

1. In-house implementation support: Check if your CLM provider offers implementation support and whether it’s handled in-house or through an external vendor. 
2. Implementation at no additional cost: If your CLM provider offers implementation, is it included within your license or does it come at an additional charge? Is it limited to specific plans? 
3. Support options and quick turnaround times: What channels of communication are available when you need support (email, audio or video calls, chat, etc.)? How long does it take for your CLM provider to reply?
4. Dedicated success or account manager: Does the CLM provider assign dedicated success managers to handle your implementation and support? If so, are there additional charges associated with it?

Why SpotDraft is the top CLM choice

Your requirements from a contract management software greatly depend on factors like your team or organization size, the types of contracts you deal with, the issues you’re facing, and your legal priorities.

That’s why it’s important to start by identifying gaps within your contract processes and listing out your must-have contract management features before choosing a solution. This helps ensure successful implementation of your new contract management software and quick ROI.

Here’s why SpotDraft is the preferred choice:

#1 Seamless scalability for growing businesses

SpotDraft’s infrastructure adapts to your business needs, allowing you to scale effortlessly as your contract volume increases.

#2 Automate routine tasks for increased efficiency

SpotDraft reduces manual effort with advanced automation and contract templates enabling faster, more efficient contract processing.

Also read: End-to-end contract automation software for legal teams - SpotDraft

#3 Keep contracts secure with robust compliance features

SpotDraft ensures the highest level of security for your contracts, with enterprise-grade protections and compliance.

Also read: Most secure CLM platform - SpotDraft

#4 Get actionable insights with customizable analytics

SpotDraft offers deep insights into your contract lifecycle, helping you make data-driven decisions to optimize processes.

Also read: How to Use Contract Analytics Software to Uncover Insights - SpotDraft

Still unsure about what CLM features your team needs or how a contract management software can help with your contract lifecycle challenges? 

Try out the SpotDraft demo to experience firsthand how it can transform your contract management system.

FAQs abot Contract Management Software Features

Q1. What are the essential features of software contracts?‍

Software contracts should outline the scope of work, licensing terms, intellectual property rights, and data protection clauses.

They also need to cover warranties, liabilities, and termination conditions. These elements ensure clear expectations between the parties and protect both from legal risks.

Q2. What must be included in a contract management software?‍

A contract management software should offer contract creation tools, automated workflows, collaboration features, and a centralized repository.

It must also include compliance tracking and audit trails. Reporting and analytics features are essential for monitoring contract performance and managing risks effectively.

Q3. What are the six stages of contract management?‍

The six stages of contract management are: request, generation, approval, execution, compliance, and renewal.

These stages cover the entire lifecycle, from identifying the need for a contract to ensuring it is adhered to, and determining whether to renew or terminate it.

Q4. How would you define the essential elements of a contract management process?‍

The contract management process includes contract creation, workflow automation, compliance tracking, centralized storage, and reporting.

It ensures that contracts are efficiently managed, compliant with regulations, and easily accessible for performance analysis and renewals.

Q5. How does contract management software improve efficiency?

Contract management software improves efficiency by automating tasks like contract creation, approvals, and renewals. It centralizes all contracts in one place, making them easy to access and track.

With automated workflows and reminders, businesses can reduce manual errors, save time, and ensure that important deadlines are met without delay. This streamlines the overall contract management process, allowing teams to focus on more strategic work.