Best Contract Management Application for Businesses [2025]

September 10, 2025

5 min read

The most successful organizations do not leave contracts to chance.

They leverage contract management application efficiency to every agreement streamlining processes, reducing risk, and ensuring that every contract contributes to business growth.

Meanwhile, research from ALM and Bloomberg Law reveals that over 40% of corporate counsel spend at least half of their workday on contract-related tasks.

Selecting a good app for contract management can transform this workload centralizing contracts, streamlining approvals, and enabling legal teams to focus on strategic priorities rather than routine administrative work.

In this blog, we will explore the features, benefits and best practices to find a system to manage contracts.

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What Is Contract Management Application?

A contract management application is a software solution that helps businesses efficiently handle all aspects of their contracts. It enables teams to create, review, approve, store, and track contracts throughout their lifecycle. By centralizing contracts in a secure digital platform, the application improves workflow efficiency, ensures compliance, and reduces the risk of missed deadlines.

With features like automated approvals, notifications, analytics, and reporting, a contract management application not only streamlines legal and operational processes but also strengthens vendor relationships and supports better business decision-making.

Key Processes Involved in Contract Management

Contract management is more than just creating and signing agreements it is a structured process that guides contracts through their entire lifecycle. Each stage plays a vital role in making sure agreements deliver value, stay compliant, and support business objectives.

1) Contract Request

The workflow starts when a team or department recognizes the necessity for a new contract. This could be for purchasing goods, hiring services, or forming partnerships.

The request stage collects all necessary details such as scope, budget, and timelines so the drafting process can start on the right track.

2) Contract Authoring

Once a request is approved, the contract authoring stage begins. At this step, the agreement’s terms, clauses, and conditions are carefully prepared in clear, precise language to avoid ambiguity and ensure mutual understanding.

By leveraging pre-approved templates and standardized clauses, businesses can speed up the drafting process.

3) Contract Review

The drafted contract is then reviewed by relevant stakeholders, which may include legal, finance, and operational teams. This step checks for accuracy, compliance, and alignment with business objectives before it moves forward.

4) Negotiation

At this stage, both parties engage in open discussions to review the terms and adjust where necessary. The focus is on finding common ground and creating an agreement that benefits everyone involved. Transparent communication and a collaborative approach not only help resolve differences smoothly but also strengthen trust between parties.

Recommended Read: Contract Negotiation Software Explained

5) Approval

Once the terms are finalized, the contract moves to the approval stage, where authorized personnel review and validate it before signing. This step ensures accuracy, compliance with organizational policies, and accountability within the process.

A structured approval workflow not only speeds up decision-making but also builds confidence that every agreement is well-governed, transparent, and ready for execution.

6) Execution

After finalization, the contract enters the execution stage, where all parties begin fulfilling their agreed-upon obligations. Organized workflows, digital signatures, and clear tracking systems make it easy to manage responsibilities, ensuring every step is completed on time.

This streamlined approach not only keeps teams aligned even across different locations and builds confidence.

7) Obligation Management

After signing, the focus shifts to fulfilling the commitments outlined in the contract. This includes delivering goods or services, making payments, and meeting agreed deadlines.

Monitoring each obligation helps guarantee that the contract achieves the results it was designed for.

8) Performance Monitoring

Ongoing monitoring ensures that every contract continues to deliver the intended value. By keeping track of key metrics, deadlines, and deliverables, businesses can stay proactive.

This not only strengthens business relationships but also drives consistent growth and long-term success.

9) Renewal or Closure

As the contract nears its end date, teams decide whether to renew, renegotiate, or close it. If the relationship is valuable, renewal discussions may begin early to avoid gaps. If all terms are fulfilled, the contract is officially concluded, and every obligation is completed.

How Does Contract Management Application Works

Step 1: Collects all necessary contract request details, including purpose, scope, and parties involved, to start the process.
Step 2: Drafts the agreement using pre-approved templates and clauses for accuracy and consistency.
Step 3: Reviews the document with feedback from legal, finance, and other relevant stakeholders.
Step 4: Refines terms until both parties reach a mutually beneficial agreement.

Step 5: Approves the final version, confirming it is ready for execution.
Step 6: Executes the agreement through secure e-signatures, making it legally binding.
Step 7: Tracks obligations, deadlines, and performance throughout the contract’s active period.
Step 8: Renews, updates, or closes the contract and stores it securely for future reference.

Why Businesses Need a Contract Management Application?

Managing contracts efficiently is more than just a legal requirement it is a key factor in running a smooth, successful business. Here are the main reasons businesses benefit from implementing contract management application.

Efficiently Manage Large Volumes of Contracts
Fortune 1000 companies typically handle between 20,000 and 40,000 active contracts.
Keeping track of this many agreements manually is time-consuming and prone to errors. A contract management application centralizes all contracts in a single platform, making it easy for teams to find, review, and manage them.

Reduce Financial Losses
Poor contract management can have a significant impact on a company’s bottom line. Studies show that organizations can lose up to 9.2% of their annual revenue due to missed deadlines, overlooked terms, or mismanaged agreements.
Automating the contract process ensures obligations are met on time, reducing the risk of revenue leakage.
Easily Access Critical Documents
It is reported that 71% of companies cannot locate 10% or more of their contracts when needed.
A digital contract management system organizes agreements with secure storage and searchable databases, allowing employees to retrieve any contract instantly, even under tight deadlines.

Streamline Legal and Operational Workflows
Managing approvals, renewals, and compliance manually can slow down operations. Contract management applications automate repetitive tasks, send reminders for upcoming deadlines, and provide structured workflows, freeing legal teams and other departments to focus on strategic tasks rather than administrative work.

Enhance Compliance and Minimize Risk
A robust contract management application tracks important dates, regulatory requirements, and key obligations.
This reduces the likelihood of missed deadlines, contractual breaches, or penalties, helping companies stay compliant and confident in their legal operations.

Build Stronger Vendor Relationships
Timely communication and organized contract management improve collaboration with vendors.
By ensuring agreements are honoured and deadlines are met, businesses strengthen trust and maintain long-term professional relationships.

Enable Informed Business Decisions
Contract management applications provide analytics and reporting features that highlight trends, risks, and performance metrics.
These insights give leaders the information they need to make smart, data-driven decisions that improve operational efficiency and support sustainable growth

Features of a Contract Management Application

A contract management application is more than just a digital storage tool it is a comprehensive solution designed to manage every stage of the contract lifecycle efficiently. Here is a closer look at the key features.

AI-Powered Contract Assistance
CLM 365 uses cutting-edge AI, powered by Microsoft Copilot, to simplify and accelerate contract management. The AI helps summarize lengthy contracts, highlight key risks and obligations, and even suggest alternative clauses for better compliance and negotiation.

Centralized Contract Repository
A robust app for contract management stores all agreements in one secure digital location. This centralized repository ensures that contracts are never lost, misplaced, or scattered across multiple drives or email threads. Teams can easily access any contract whenever needed, improving efficiency and transparency.

Automated Workflows
Make contract creation, review, and approval faster and easier with automated workflows. The system sends contracts to the right people, reminds you about important dates, and tracks progress at every step.
This keeps everything organised, avoids mistakes, and helps contracts get completed smoothly and on time.

Version Control
Contract management application easily keeps track of every change made to a contract with smart version control. As contracts go through multiple rounds of editing, the contract lifecycle management app automatically records each update.
Users can quickly compare different versions, check who made the changes, and bring back an earlier draft whenever needed.
This means everyone always works on the latest approved document, avoiding confusion, preventing costly mistakes, and keeping a clear record of all edits for full transparency.
Template and Clause Library
Save valuable time and keep your contracts consistent with a built-in clause library of ready-to-use templates and pre-approved clauses.
Instead of creating contracts from scratch every time, your team can use professional, legally compliant formats that match company policies.
This speeds up the process, reduces the chance of legal errors, and ensures every contract meets the same quality.
Advanced Search and Filtering
Find any contract or clause in just a few clicks with powerful search and filter tools. Teams can look for documents by keywords, dates, contract types, or even special tags your team creates.
This makes it easy to locate exactly what you need without wasting hours searching through folders or emails everything is organised and instantly accessible.
Reporting and Analytics
Make confident, data-driven decisions with easy-to-read dashboards and detailed reports. The system tracks important information like contract expiry dates, key obligations, renewal opportunities, and compliance status.
With these insights, leaders can act before issues arise, minimise risks, and analyse opportunities to improve contract process and boost revenue.
Integration with Other Systems
Work smarter by connecting your contract management application with other business tools like SharePoint, MS Teams and Outlook and document management platforms.
These integrations ensure that contract information flows smoothly across departments, stays accurate everywhere, and reduces the need for manual data entry.
This keeps sales, finance, procurement, and legal teams on the same page always.
E-signature Support
Accelerate contract approvals using safe and legally valid electronic signatures. Sign from anywhere, on any device, without printing, scanning, or mailing papers.
This not only speeds up the approval process but also reduces paper usage, making your business operations more efficient and environmentally friendly.]

Benefits of Using Contract Management Application

In business, contracts are the backbone of every deal, partnership, and opportunity. Yet, managing them manual follow-ups can hold your growth back. A contract management app changes that. Here are some benefits of using a app to manage agreements.

1) More Time for Strategic Work

In business, every minute spent on repetitive administrative tasks is time taken away from activities that drive revenue.

With an application streamlining the entire contract management process, your team can move away from chasing signatures, hunting for files, and checking deadlines.

Instead, they can focus on building stronger relationships with clients, negotiating better deals, and exploring new markets.

Moving from daily problem-solving to strategic planning fosters sustainable business growth.

2) Fewer Missed Opportunities

A missed renewal date or delayed follow-up can mean losing a valuable customer or a chance to renegotiate favourable terms.

With automated alerts and complete visibility, every opportunity whether it is a contract extension, upsell, or new collaboration stays in sight.

Instead of reacting to missed chances, your business stays one step ahead, turning every renewal cycle into a potential revenue boost.

3) Greater Revenue Protection

Every clause in a contract exists for a reason it protects your business interests. A contract management application ensures these terms are never overlooked.

Payment schedules, deliverable deadlines, and contract obligations are tracked precisely, reducing the risk of late payments, disputes, or breaches.

This level of control not only protects revenue but also strengthens your position in negotiations.

4) Boosted Team Productivity

Implementing contract automation can cut manual involvement in the contracting process by as much as 60%, streamlining workflows and accelerating turnaround times.

Key actions like sending reminders, updating stakeholders, and initiating approvals are triggered automatically, ensuring contracts progress without delays.

This structured contract automation approach allows teams to focus on higher-value work, accelerates project initiation, and shortens deal closure timelines. The outcome is a streamlined, collaborative, and results-focused workplace.

5) Higher Client and Partner Trust

Consistency builds trust. When you handle contracts with speed, accuracy, and professionalism, clients and partners see you as reliable and competent.

This confidence encourages businesses to sign longer agreements, commit to bigger projects, and recommend your business to others.

Trust turns into loyalty, and loyalty turns into recurring revenue.

6) Reduced Legal & Financial Risks

A contract management application ensures that every agreement is monitored with precision, so no obligation, renewal date, or key term goes unnoticed.

This level of oversight helps prevent unexpected costs, safeguards revenue, and keeps agreements working in your favour.

By staying ahead of critical deadlines and contractual commitments, businesses can maintain operational stability and protect profitability.

7) Empowered and Efficient Legal Teams

A contract management application gives legal teams instant access to accurate, organized, and up-to-date agreements.

This eliminates time spent searching for documents or verifying terms, allowing them to focus on higher-value tasks such as strategic negotiations and risk assessment.

Faster access to information means quicker responses to business queries, greater alignment with other departments, and the ability to support growth without adding headcount or workload pressure.

Key Industries Using Contract Management Applications

Contract management applications have become essential across industries where agreements, compliance, and operational efficiency are critical. Here are some industries that uses the system.

Legal Services
Law firms and in-house legal teams use contract management applications to organize case-related agreements, streamline approvals, and maintain accurate records. The legal contract management software helps ensure compliance and builds client trust.

Finance and Banking
Banks and financial institutions use these platforms to manage loan agreements, investment contracts, and vendor relationships. They also help meet strict regulatory requirements with ease.

Healthcare and Life Sciences
Hospitals, pharmaceutical companies, and healthcare providers use contract management to handle vendor agreements. The contract management application for healthcare providers helps them to handle agreement safe and secure.

Real Estate and Construction
Property developers, real estate agencies, and contractors use these tools to manage lease agreements, project contracts, and supplier terms. This keeps projects on schedule and budgets under control.

Technology and IT Services
Tech companies rely on contract management to handle SaaS agreements, service-level contracts, and partnership deals. This ensures smooth collaboration and timely renewals.

Manufacturing and Supply Chain
Manufacturers use app for contract management to manage supplier agreements, logistics contracts, and compliance documents efficiently. This helps avoid delays and costly disruptions.

Government and Public Sector
Government agencies use contract management to oversee procurement processes, vendor agreements, and compliance records. This ensures transparency and accountability in operations.
By simplifying workflows and improving contract visibility, these industries achieve faster deal cycles, stronger compliance, and better overall performance.

Common Challenges in Contract Management

Contract management is an important business function that connects multiple teams, processes, and strategic goals. It is not just about signing agreements. Here are some challenges to consider.

Contract Organization
Contracts are often created in various formats, from digital files to scanned documents. They may also be stored in different locations, such as shared drives, email threads, or physical archives.
Establishing a central and well-structured repository ensures that documents can be retrieved quickly and referenced when needed.
This improves consistency, minimizes duplicate work, and creates a reliable single source of truth for the entire organization.

Tracking Key Dates
Every contract includes important dates such as renewal periods, payment milestones, or review checkpoints that influence financial planning and operational timelines.
Monitoring these dates closely ensures that commitments are fulfilled on time and adjustments can be made when necessary.
A reliable tracking method helps maintain momentum in business relationships and supports smooth project execution.

Approval Coordination
Finalizing a contract often requires reviews and authorizations from multiple stakeholders, including legal, finance, and operations teams.
Coordinating these contract approvals in a structured manner helps avoid delays and keeps processes on schedule.
When each step of the review cycle is clearly defined, teams can maintain steady progress without unnecessary follow-ups.

Version Management
During negotiations, contracts often go through multiple revisions. Without a clear process for managing these versions, there is a possibility of confusion over which draft is the most current.
Maintaining an organized version history ensures that everyone involved works from the same, most accurate document.
This practice reduces inconsistencies and supports clarity in communications.

Cross-Department Visibility
Contracts impact several departments, and each team may need different information from the same document.
Providing secure yet shared access ensures that everyone has the information they require without unnecessary delays.
This shared visibility encourages collaboration and ensures that decisions are based on the most up-to-date information.

Compliance Readiness
In industries where regulatory adherence is essential, contracts must be prepared for audits. Maintaining well-organized audits and easily retrievable records ensures that compliance requirements can be done efficiently.
This readiness not only supports operational continuity but also reinforces the organization’s commitment to transparency and accountability.

Access to Contract Insights
Beyond their legal purpose, contracts hold valuable business data such as cost trends, supplier performance, and negotiation outcomes.
When this data is easy to analyse, organizations can identify opportunities for better terms, improved efficiency, and long-term savings. Leveraging these insights supports informed planning and more strategic decision-making.
By addressing these focus areas with structured processes, clear communication, and the right tools, organizations can ensure that contracts remain effective, transparent, and supportive of broader business goals.

Best Practices for Implementing a Contract Management Application

Implementing a contract management application effectively requires a thoughtful approach that aligns the technology with your organization’s processes, goals, and people.

1. Identify if the System Uses AI or Automation

Before selecting a contract management application, it’s important to know whether it leverages AI or automated workflows. This determines how efficiently it can handle repetitive tasks, detect contract clauses, and provide insights from large data sets.

Ask the vendor if the system uses AI for clause recognition and contract analysis.
Review examples of how the system automates contract review or approval processes.
Compare manual effort required with and without AI features.

2. Map Your Contract Lifecycle Stages

Every organization has a unique sequence for drafting, reviewing, signing, and storing contracts. Mapping these stages helps in configuring the contract management application to match real operational needs.

Document your current contract lifecycle in detail.
Identify steps that can be optimized without changing your core processes.
Configure the application to follow this lifecycle from start to finish.

3. Consolidate Your Contract Storage

Centralizing all contracts in one secure system reduces the need to search across multiple locations. This establishes a definitive reference point for everyone involved.

Move all existing contracts into the new system before going live.
Categorize contracts by type, department, or project for easier access.
Apply consistent naming conventions to make searching faster.

4. Define Approval Roles Clearly

Contract approvals often require input from legal, finance, and department heads. Setting up clear roles in the system avoids confusion during reviews.

List all people involved in contract approvals and their specific roles.
Assign role-based access levels in the application.
Set clear timelines for each approval stage.

5. Set Up Alerts for Critical Dates

Contracts include key dates such as renewals, payment milestones, or review deadlines. Timely alerts help teams act without delays.

Add renewal, expiry, and payment dates into the application.
Assign reminders to the right individuals or teams.
Test the alert system before it goes live to confirm accuracy.

6. Provide Role-Specific Training

Not all users need to know every feature of the contract management application. Tailoring training to each role saves time and improves adoption.

Segment users by role—legal, finance, procurement, or project managers.
Provide focused sessions that cover only the relevant features.
Share quick reference guides for future use.

7. Review and Refine After Launch

The initial setup may require adjustments once the system is in use. Regular review helps align the application with evolving business needs.

Collect feedback from users on their experience.
Monitor system usage reports to see if key features are being used.
Make periodic updates to workflows, roles, or data fields.

CLM 365 – Best Contract Management Application

CLM 365 is built within the Microsoft ecosystem, offering seamless integration with Microsoft 365 tools like Outlook, MS Teams, SharePoint, MS Copilot, and the MS Word Plugin. With its powerful AI and automation capabilities, it makes the entire contract management process more efficient from drafting to approvals. It also supports secure workflows, ensuring contracts are handled with precision, compliance, and data protection.

How to Deploy CLM 365 Into Your Existing Workflow

Adopting CLM 365 into your current business processes is easy. Here are some points how to implement it.

Review your current contract lifecycle stages and identify bottlenecks.
List the tools and platforms you already use for drafting, approvals, and storage.
Enable CLM 365 and link it with your Microsoft 365 account.
Integrate with Outlook, MS Teams, SharePoint, MS Copilot, and MS Word Plugin.
Configure approval processes, assign role-specific access, and enable automated notifications.
Educate the team using hands-on examples and concise guides.
Track performance, measure efficiency gains, and refine workflows.

Tip: Users can enhance their contract management process with a contract management application. CLM 365’s AI agent automatically analyzes contract summaries, highlights key risks, obligations, and other critical information, reducing the need to read each contract manually.

Conclusion

For businesses seeking full control over their contracts and stronger compliance, a contract management application is essential. By automating manual tasks and supporting smarter decisions, the right solution helps save time, reduce costs, and minimize legal risks.

Is your current contract process slowing you down?

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Frequently Asked Questions

Are contract management applications suitable only for large enterprises?

No. Small, medium, and large businesses can all benefit, as it saves time and reduces errors at any scale.

What are the key features users should consider before buying?

Look for AI-powered capabilities, strong integration with your existing tools, and the ability to automate the entire contract lifecycle. Other essentials include centralized storage, automated alerts, e-signatures, advanced search, detailed reporting, and seamless integration with business applications.