What is contract management software?

Contract management software or contract management platform is a software tool designed to handle contracts of third-party vendors, suppliers, and even clients and employees. CLM software can be visualized as a virtual file cabinet, which contains contract details of any relevant individual or a group.

Contract software manages different stages of a contract life cycle, starting from the request for contract till the last stage of review of a contract before it lapses. It helps manage details at the stages of contract creation, negotiation, and amendment if any. It also helps to get an electronic signature on legal contracts.

Popular Contract Management System Types

Healthcare contract management software

Contract management platforms are essential in the healthcare industry to ensure that companies are complying with defined standards for appropriate care of patients. Contract review software allows better tracking of compliances, email notifications, and better organization of legal documents by attaching original contract with edits, revision in one place.

Legal contract management software

Contract tracking software allows legal teams in organizations to create, negotiate, and make amendments to contracts at a fast pace. Contract automation software not only increases their efficiency but also helps them mitigate risk and improve compliance rates.

Service contract management software

CLM software is also used by organizations for designing service contracts for third-party vendors, sellers, and even employees. By designing a service contract using a contract management software, you can lay down the terms related to the service period and even extend it without any hassle.

Government contract management software

Contract software is used to design government contracts or tenders related to projects for the general welfare. Contract management software makes the process of issuing contracts more transparent, induces answerability, and ensures timely completion of the assigned projects.

Construction contract management software

Use of best contract management software ensures end-to-end monitoring of construction projects, the addition of notes by workers, and easy search to find a specific subcontract in a lengthy, multi-page contract.

Enterprise contract management software

By using a contract lifecycle management tool, organizations can unite their several enterprises for better management. It also helps them track any shortcomings being suffered by a particular department

Vendor contract management software

The contract management platform enables the creation of seamless vendor contracts which state the term of the contract period, expected deliverables, actions in case of non-compliance, and how third-party vendors would be tracked till the contract is in place.

Must-Have Contract Management Software Features

Contract management software has the following features:

Mobile application version

An efficient CLM software should have a mobile application version that allows you to create, edit, and sign contracts through your Android or iOS devices.

Personalized dashboard

Depending on the industry for which the contract is being created, contract lifecycle management tools should offer a customizable dashboard to which users can add features and metrics to view and analyze quickly.

Easy Editing

The contract management platform should allow ease in making changes as and when a new business process is started, without having to make changes in the source code.

Access control

With contract management software, you must be able to clearly define the access control of different people in your organization related to developed contracts. This helps to define who has what sort of access to these documents and hence maintain the safety of these contracts.

Holistic view of several contracts

By using contract review software, you should be able to view different subcontracts existing within a single contract as well as various contracts signed across several departments. This holistic view should be possible within the same platform.

Mitigation of risk

Contact management software helps an organization access risk associated with a third-party vendor, seller, and employee contracts, relay this risk to the concerned individuals and then mitigate these risks.

Feature of adding e-signature

Contract Automation software is used for automating contract development processes with the availability of adding or removing signatures digitally. For this, contract management software also integrates third-party e-signature apps.

Portfolio monitoring

Contract management software ensures effective monitoring of a portfolio consisting of several contracts signed across the company. Users with appropriate access can access them through CLM software’s easy-to-use and interactive interface.

Advanced search functions

Many times you need to search for a particular subcontractor subsection within a large contract. Without advanced search functions, this process can be too cumbersome. By using contract lifecycle management tools, you can efficiently search for even words or phrases and get correct results, without having to physically look through the contract.

Pre-set templates

Contract software comes loaded with multiple templates you can utilize to draft a contract in minimum time, thus increasing your efficiency. Contract management software also provides the feature of drafting contracts in different languages, as per your convenience.

Managing contract workflows

Contract management platforms offer the feature of creating workflows through which contract makers can know whether the terms of a contract are being followed from start to end. Such workflows created using the best contract management software allows users to add specific actions to each outcome.

Automated alerts

Automated alerts in contract review software help you to keep a tab on the expiration date of a specific contract. Taking heed of this alert, you can extend the duration of the contract if applicable. With contract tracking software, you can choose the format in which you want the alerts to be sent; mails, text messages, etc.

Typical Benefits of Using Contract Management Tools

Contract management software has several benefits. We list some of them below:

Knowledge of expiration dates for timely contract renewal

By using a contract management platform to sign contracts, both parties are aware of the contract expiration date before which all or any expected work is to be completed. Awareness of the expiration date also helps extend time duration of the contract.

Contracts can be referred anytime

Contract management software helps create contracts digitally, which can be accessed anywhere and anytime to refer to and discuss specific sections within the contract.

CLM software for paperless documentation

Contract management software ensures that lengthy contracts for different parties can be created digitally, shared, and managed easily, without the need to maintain bulky paper files.

Integration with recurring invoices

Contract management software can be integrated with automatic invoice processing software to keep unauthorized transactions in check. It also helps reduce the time spent on creating recurring invoices.

Increased efficiency

Contract management software helps with the easy creation of complex contracts and increases the efficiency of teams concerned with the creation of such contracts. It also helps them improve compliance and mitigate risks as and when they arise.

Better analysis of performance

By using contract management software, companies can track the performance of third-party vendors and suppliers. In the case of sub-par performance, companies can act as mentioned in the vendor and supplier contract.

Commitment to project completion

Contract management software builds a better commitment to project completion as any changes or reviews related to the original contract can be done at a fast pace. Also, clearances required for certain processes can also be given at a quick pace as contract automation software has the feature of digitally adding signatures

Better preparation for audits

CLM software maintains a complete list of contracts signed by an organization for a particular time period. They can be easily accessed and presented at the time of internal or external audit.

Shorten contract approval process

Contract automation software automates several processes associated with contract drafting. It also allows the legal team to track all contractual obligations and modify the contract basis whether those obligations are being followed or not.

Contract Management Software: Understanding Market Trends

The following trends are impacting contract management software’s demand in the industry:

Increased demand for cloud-based solutions

There is an increased demand for contract management software providing cloud services to ensure safe storage of signed contracts and multiple device access.

More focus on data privacy

Contract management software is being employed across the world to not only draft and manage contracts safely but to also ensure that all sorts of data stored on the contract management platform has enough security and proper access controls in place.

Suitability for small businesses

Contract management software is gaining popularity for small-scale organizations for legal and sales purposes. They can better track third party vendors and suppliers and also speed up project completion with the best contract management software.

Popularity across sectors

Contract management software will continue to be used in Government, Construction, Telecom, Banking, Manufacturing and other such sectors.

Enhanced customer experience

Companies are targeting for better customer experience by using contract software to sign error-free, professional, and intuitive contracts.

Automation of contract processes

Several processes involved in drafting a contract are being automated to save time and increase efficiency. Automation has a huge role to play in providing faster clearances and project completion by adding signatures digitally.

What to Consider when Buying Contract Lifecycle Management Software

Easy to use

Contract management should be easy to use. It should facilitate collaborations between teams to create contracts in a short duration of time.

Customized dashboard

Contract management software should provide a customized dashboard that can be designed by a user as per their need and convenience.

Risk Mitigation

Contract management software should be able to identify and mitigate risks already present in the contract or risks which might be identified during contract review.

Efficiency in project completion

Contract management software should be able to speed up the project completion process by providing the feature of adding signatures digitally

Access Control

Contract management software should have robust access controls in place so that only a person with proper authorization can access and review signed contracts.