Best CLM Software: Manage Contracts Easily

August 26, 2025

6 min read

Strong businesses are built on strong agreements. CLM software turns contracts into valuable assets bringing clarity, speed, and confidence to every stage of the process.

With the best software, organizations unlock faster growth, build lasting partnerships, and make every deal a step forward.

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Quick Read

Summary generated by AI, reviewed for accuracy.

In this guide, we will cover the essentials and highlight the features that matter most helping you make a clear and confident choice for your business.

But, with a wide range of vendors, features, and innovations available, businesses today have more opportunities than ever to find best CLM software that truly fits their needs.

The truth is that the best choice is not about having the most tools it is about finding the one that delivers real business value.

What Is CLM Software?

CLM software is a digital solution that helps organizations manage contracts from start to finish. It manages the entire contract journey from drafting and negotiation to approval, signing, and renewal all within one unified platform.

It gives businesses better visibility, stronger control, and faster access to their agreements.

By tracking deadlines, highlighting key terms, and storing contracts securely, it reduces risks while improving efficiency.

Key Stages of the Contract Lifecycle

Every contract goes through a journey from its initial idea to its outcome. Understanding these stages is crucial for businesses because it not only improves efficiency but also reduces risks and strengthens relationships with clients, vendors, and partners. Here is how it works,

1. Request

The lifecycle begins when a department, team, or stakeholder identifies the need for a new contract. This could be for hiring a vendor, forming a partnership, or outlining terms with a new client. Clear documentation of needs at this stage helps prevent misunderstandings later.

2. Authoring

In this stage, a draft of the contract is created. Standard templates, pre-approved clauses, and legal guidelines are often used to save time and reduce risks. A carefully prepared contract lays the groundwork for clear negotiations and reliable compliance.

3. Negotiation

Both parties review the draft, suggest changes, and work toward common ground. This stage is about balancing business goals with fairness, ensuring that all sides feel confident about the agreement.

4. Approval

Before a agreement can move forward, it requires internal contract approval. Legal, finance, or executive teams often review the terms to confirm accuracy, compliance, and alignment with company policies.

5. Execution

Contract execution takes place once all necessary approvals are in place and the agreement is ready to be finalized. At this stage, the contract is officially signed by all parties, making it legally binding and enforceable.

6. Obligation Management

After signing, the contract becomes active. Businesses must monitor deadlines, deliverables, and responsibilities to ensure both parties meet their commitments. Effective contract obligation management protects revenue and strengthens trust.

7. Compliance & Auditing

Regular reviews ensure that the contract follows both internal company policies and external regulations. This stage minimizes the risk of legal disputes and makes audits smoother and more transparent.

8. Renewal or Closure

As the contract nears its end date, organizations must decide whether to contract needs to renew, renegotiate, or close it. Proactive management at this stage ensures no missed opportunities or unexpected lapses in business relationships.

The Importance of CLM Software for Modern Businesses

According to a KPMG study on outsourcing vendors, businesses risk losing up to 40% of a contract’s value when contracts are not managed with proper control. That figure highlights how much can be at stake when agreements are handled without structure.

Key reasons why contract management is important,

Contracts define revenue, costs, and obligations that directly impact business performance.

As the number of contracts increases, keeping track manually becomes slow and challenging.

Missed deadlines or overlooked clauses can lead to financial losses and disputes.

Lack of visibility into contracts increases the risk of non-compliance.

Poorly managed contracts weaken relationships with clients, suppliers, and partners.

Structured contract management creates consistency across all business dealings.

CLM Software vs. Manual Process

When comparing a dedicated enterprise CLM software with a traditional manual process, the distinctions become clear in terms of consistency, efficiency, and adaptability.

Aspect	Manual Process	CLM Software
Consistency	Relies on individual handling, which may lead to variations in style and execution.	Provides a structured and uniform approach across all agreements.
Efficiency	Often requires more time as each step is handled separately.	Designed to streamline steps and reduce delays.
Accessibility	Access depends on where and how the agreement is maintained.	Centralized access makes it easier to work collaboratively.
Tracking	Depends on human checks, which can sometimes be overlooked.	Built to minimize oversights and improve compliance.
Scalability	Becomes increasingly complex when volume increases.	Adapts easily as the volume of contracts grows.

Features of Enterprise CLM Software

Contracts form the foundation of all business relationships. Enterprise CLM software makes handling them easier, smarter, and more reliable. Here are some features to consider.

1) AI That Brings Clarity

Artificial Intelligence in contract lifecycle management is not about replacing people it is about empowering them. The system reads through contracts, extracts the essentials, and highlights obligations and risks that may otherwise go unnoticed.

Assume that reviewing a supplier contract that runs 20 pages. Instead of spending hours trying to understand legal language, you get an easy summary that highlights the main duties and possible risks.

It gives leaders the confidence to make informed decisions quickly, without second-guessing what they might have missed.

2) Contract Creation Made Simple

According to a study by Bloomberg Law, 62% of professionals said that drafting, reviewing, and negotiating make up more than half of their contract work.

Creating contracts does not have to be time-consuming. With enterprise CLM software, contracts can even be created directly from Outlook using ready-to-use templates and intelligent guidance.

Teams no longer need to start from scratch or worry about reworking old files. Instead, they can quickly generate accurate and professional contracts saving valuable time.

Recommended Read: Benefits of Contract Creation Software

3) Approvals Without Delays

Approvals are vital, but they should never slow business down. A clear contract approval process means contracts move along the right path, reaching the right people at the right moment.

Each stakeholder can review, provide input, and sign off with ease. The result is progress without unnecessary waiting keeping projects on track and relationships strong.

4) Compliance at the Core

Staying compliant is effortless with best CLM software. Every contract is automatically aligned with company policies, industry rules, and local laws.

This ensures accuracy and consistency in every agreement, letting teams confidently focus on building strong and trusted partnerships.

5) Routing Contracts Beyond the Walls

Contracts often extend beyond the organization. Vendors, suppliers, and partners need to review, respond, and contribute.

With contract routing, businesses can securely share documents outside their own teams while still maintaining visibility and control.

It creates a professional, transparent way of collaborating that strengthens relationships rather than complicating them.

6) Agreement Redlining

A study by EY found that 71% of contracts are not regularly checked to see if they differ from the company’s standard terms.

Edits and revisions are captured with precision using contract redlining feature. Every addition, removal, and adjustment is clearly recorded.

This creates a single source of truth for all parties. The teams can see the full history, promoting trust, transparency, and smooth collaboration.

Teams can work together efficiently, knowing every change is tracked and visible.

7) Negotiation With Confidence

Negotiations happen easily within the platform. All requests, adjustments, and terms are monitored with complete clarity.

Each step of negotiation process is fully documented for complete visibility. Both sides can see all updates in one place. Every agreement is shaped fairly and efficiently.

Teams can collaborate smoothly, knowing all changes are visible and organized.

8) Digital Signatures That Move Business Forward

The moment of signing is where agreements turn into action. Digital signatures remove the delays that often come with traditional signing methods.

Authorized parties can sign securely from anywhere, completing agreements in hours rather than weeks.

It is fast, reliable, and recognized legally turning opportunities into results without unnecessary barriers.

9) Audit Trails That Build Trust

Every action taken within the system leaves a mark: who made a change, who approved, and when it happened.

These audit trails create a transparent record that can be referenced at any time.

This not only strengthens accountability but also builds trust internally and externally.

10) Real-Time Reporting

Contracts hold important data, and the platform brings that data to life. Real-time reporting turns every contract into clear insights.

This visibility supports strategic actions, strengthens commitments, and guides smarter decisions that drive growth.

Teams can instantly view active contracts, upcoming renewals, and key obligations.

Benefits of Enterprise CLM Software

Effective contract management can help a business cut costs, with studies showing savings of up to 2% of total annual expenses. This shows the best CLM software adds speed, clarity, and accuracy. Here are some key benefits to consider.

1) Automation in Contracts

According to Aberdeen Research, automation can lower contract-related administrative costs by 25–30%. This reduction comes from replacing manual work like drafting, reviewing, tracking dates, and routing approvals with automated systems.

By removing repetitive tasks, automation shortens contract cycles and minimizes delays. Teams can spend more time on strategic activities such as negotiating better terms and strengthening relationships, instead of chasing paperwork.

In short, automation not only saves costs but also adds speed, clarity, and better control to the contract process.

2) Greater Clarity in Decision-Making

Contracts can be detailed and difficult to navigate. With the support of AI-driven analysis, organizations gain concise summaries and visibility into obligations and risks that might otherwise be buried in fine print.

This clarity allows leaders to act with confidence, focusing their attention on the details that matter most.

For example, uncovering a renewal clause before finalizing a supplier agreement could prevent a costly long-term commitment.

In every case, the outcome is sharper decisions and stronger business foresight.

3) Time Saved Where It Counts

Delays in contracts often mean missed opportunities. With contract automation feature the agreement lifecycles move faster.

What once took weeks of manual follow-ups can now be accomplished in just a fraction of the time.

This efficiency is not only about speed it empowers teams to focus more on building stronger vendor relationships.

4) Confidence in Compliance

Regulations keep getting more complex but managing them does not have to be difficult.

A best CLM software make sure every contract follows both internal policies and external requirements with ease.

By keeping processes consistent, it minimizes risks and builds confidence that every agreement is on solid legal ground.

5) Stronger Relationships with Partners

Trust grows when every contract is handled with clarity and care. By providing a structured way to collaborate, your organization makes it easier for vendors to see the value you bring.

This vendor contract management approach not only prevents misunderstandings but also builds confidence in every contract.

It shows vendors that working with your business will always be professional, respectful, and efficient.

6) Transparency Across Every Change

Every contract grows stronger with clarity. Recording each revision in a transparent way gives vendors and partners complete confidence in what changed and why.

This openness not only removes confusion but also encourages smoother collaboration and stronger partnerships.

Over time, such clarity builds lasting trust that supports growth and long-term success together.

7) Fairer Negotiations and Better Outcomes

Negotiations shape the value of a deal, and they work best when every party feels fairly treated.

By capturing concessions and adjustments in an organized way, businesses gain full visibility into the give-and-take of discussions.

This fosters more balanced agreements, strengthening partnerships while protecting business interests.

The result is not just closed deals, but healthier long-term relationships built on fairness.

8) Faster Deals

Markets move quickly, and the ability to finalize contracts at the right moment can make all the difference.

A best CLM software helps organizations close contracts faster while keeping accuracy and professionalism intact.

With fewer delays, businesses can stay competitive, grab opportunities as they come, and respond to customer needs with clarity and confidence.

The Business Impact and ROI of CLM Software

When organizations invest in CLM software, the return on investment is not limited to cost savings. ROI can be measured through specific, quantifiable outcomes that reflect how contracts are managed, executed, and analysed within the business.

CLM software optimizes contract processing and reduces administrative effort, saving operational costs.

Improves accuracy and consistency in contracts, strengthening financial outcomes and maximizing revenue potential.

Enhances compliance and contract tracking, supporting cost-efficient legal and regulatory management.

Enables timely renewals and clear contract visibility, increasing revenue opportunities and capturing value.

It streamlines contract workflows, reducing resource effort and boosting team productivity.

Centralizes contract data, allowing smarter decision-making and minimizing dependence on external support.

It accelerates contract approvals, helping close deals faster and improving cash flow.

It provides advanced analytics, empowering stronger negotiation outcomes and higher-value contracts.

It increases team efficiency, enabling more contracts to be managed and generating greater business impact.

Challenges Faced During the Contracting Process

Managing contracts may look straightforward at first, but in reality, organizations face several challenges throughout the contract lifecycle that make the process more complex and time-consuming.

1. Lengthy contract creation

Creating a contract is not always quick, without a system in place. The process usually begins with gathering information, drafting initial terms, and involving different departments for their feedback.

Each stage adds more time, and when legal teams, finance teams, and business managers all need to contribute, the process can become slow.

This often delays the finalization of agreements that businesses need to move forward.

2. Difficulty in collaboration

Contracts involve multiple teams such as sales, procurement, finance, and legal. Each team looks at the contract from a different angle, which is valuable but can also cause delays if communication is not clear.

Legal teams may work in silos, and it becomes hard to know who is handling what part of the contract.

This lack of smooth coordination can leave teams waiting for updates and make the process slower than it should be.

3. Tracking contract versions

Contracts often go through several revisions before reaching the final draft. Without a proper way to track these agreements, it is easy for people to work on outdated copies.

This creates confusion because no one is sure which version should be treated as the latest and correct one.

In many cases, this can result in wasted effort or small mistakes that take more time to fix later.

4. Missed deadlines and renewals

Every contract has important dates linked to it, such as renewal deadlines, payment schedules, or compliance reviews.

When these dates are missed, businesses can lose opportunities or even face financial penalties.

For example, a missed renewal might mean losing a valuable vendor relationship or entering less favourable terms later.

Having a clear way to track these deadlines is important.

5. Limited visibility

Companies lose upto 9.2% of their yearly revenue because of inefficiencies, while also spending heavily on managing contracts and related tasks.

Contracts are often kept in many different places, like local drives, emails, or shared folders.

Without a single place to store them, teams find it hard to see all active agreements clearly.

This makes it difficult to track obligations, spot risks, and respond on time.

6. Compliance challenges

Each contract needs to follow rules and regulations, both internal and external. For global businesses, this may also include country-specific laws and industry standards.

Managing all these requirements across hundreds or thousands of contracts is a demanding task.

Without proper oversight, there is a chance that certain obligations might not be followed, which can put the company at risk of reputational or financial issues.

7. Data and reporting gaps

Contracts hold a lot of valuable details such as costs, supplier performance, and payment terms.

When teams cannot find or use this data quickly, they lose the chance to make better decisions and gain useful insights.

But this information is often hidden inside long documents and not easy to pull out.

8. Difficulty in approval process

The approval step is one of the main reasons contracts get delayed. Approvals usually need feedback from senior team members who may already have busy schedules.

At times, it is also unclear who has the right authority to approve certain parts, which creates more delays and confusion.

Best Practices to Implement During the Process

Investing in a contract management solution is a big step forward for any organization. The way you set up, use, and maintain the system will decide whether it becomes just another tool or a long-term advantage for your business. Below are some best practices to implement.

1. Standardize Contract Templates

When different teams create contracts in their own style, the language and structure can vary widely, leaving room for confusion and unnecessary review cycles.

By leveraging standardized templates, create a solid foundation that everyone in the organization can trust.

These contract clause not only save time but also provide legal consistency, which reduces the chance of misinterpretation later.

2. Build a Central Contract Repository

According to a research by EY, 90% of contracting professionals find it challenging to locate contracts efficiently.

This shows a centralized digital repository changes that experience entirely.

By keeping every contract in a single, secure hub, your organization gains complete visibility into its agreements.

This central space allows anyone whether from legal, finance, sales, or procurement to instantly access the latest approved version of a contract.

3. Design Clear Approval Workflows

Without a defined approval structure, contracts can get delayed when signatures are pending or decision points are unclear.

By assigning clear roles and responsibilities within the contract management platform, contracts automatically move to the right person at the right time.

A well-thought-out approval workflow brings clarity to the process.

4. Train and Empower Your Teams

Adopting a new system is only valuable when people feel comfortable using it.

Training sessions are essential to help employees understand how to make the most of the platform.

Continuous learning opportunities encourage teams to explore advanced features like notifications, dashboards, and audit trails.

5. Track Key Dates and Obligations

One of the biggest risks in contract management process is missing important deadlines such as renewals, payments, or compliance filings.

A good practice is to set automated reminders and alerts within the system. This proactive approach helps your organization stay ahead of key obligations or missed opportunities.

For instance, receiving an early reminder for a vendor renewal gives your procurement team time to negotiate better terms.

6. Leverage Analytics and Insights

Contracts hold valuable information, but without analysis, that data often goes unused.

Advanced reporting tools within CLM software allow you to turn raw data into meaningful insights.

These insights empower you to make smarter business decisions. For example, if reports show that certain clauses consistently slow down approvals, legal can revisit and adjust those terms.

Recommended Read: What Is Contract Analytics

7. Encourage Cross-Department Collaboration

Contracts affect many areas of a business legal, finance, HR, procurement, and sales all have a stake in them.

To get the best results, it’s important to encourage collaboration across these teams within the platform.

When everyone shares updates in one place, miscommunication is reduced, and alignment becomes easier.

8. Keep Processes Flexible and Updated

As businesses grow, their contract requirements evolve. Policies that were effective last year may no longer suit today’s scale or regulatory needs.

A best practice is to periodically review your workflows, templates, and approval structures to see if they match current business realities.

Updating your system regularly keeps it aligned with your company’s goals.

How to Implement CLM 365 Into Your System

Implementing SharePoint contract management like CLM 365 is the key to getting more value from your contracts and improving how your teams manage them. The following steps provide a clear path to help your organization adopt the system effectively.

Step 1: Assess Your Current Process
Review your existing contract lifecycle stages and identify any challenges or delays. Understanding your current workflow helps you make the most of the new system.

Step 2: Take Inventory of Existing Tools
List the tools and platforms you already use for drafting, approvals, and storage. This will help plan integrations and avoid duplication.

Step 3: Activate CLM 365
Set up your CLM 365 account and connect it to your Microsoft 365 environment to start using the platform.

Step 4: Integrate With Key Microsoft Tools
Connect CLM 365 with Outlook, Teams, SharePoint, MS Word Plugin, and MS Copilot to bring contracts into the tools your team uses every day.

Step 5: Configure Workflows and Permissions
Set up approval workflows, assign role-based permissions, and configure automated alerts for key dates and tasks.

Step 6: Train Your Team
Provide training using practical examples and quick guides so employees feel confident using the system in real scenarios.

Step 7: Monitor and Refine
Track performance, measure efficiency gains, and adjust workflows as needed to improve how contracts move through the organization.

CLM 365: Best CLM Software for Businesses

CLM 365 is designed to bring efficiency and clarity to contract management, built entirely on the trusted Microsoft Ecosystem. It integrates smoothly within Microsoft 365 apps like MS Teams, Outlook, SharePoint, MS Word, and MS Copilot. With intelligent AI features and automation capabilities, the CLM software helps organizations manage contracts more effectively.

Additionally, CLM 365 is available on Microsoft AppSource, making it easy for businesses to deploy, scale, and access the platform within their existing Microsoft environment.

Conclusion

Contracts are the backbone of every business. The right CLM software makes managing them simple, clear, and organized. It helps teams meet deadlines, track obligations, and make better decisions without stress.

If you want a tool that truly transforms how your business handles contracts, Book a free demo with CLM 365, Designed to make your work easier.

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Frequently Asked Questions

How do I know if my organization is ready for CLM software?

Your organization is ready for CLM software if you notice these signs:

Difficulty locating contracts: Teams spend excessive time searching for contracts across emails, drives, or shared folders.

Approval delays and missed deadlines: Contracts often wait for signatures or key renewals are overlooked.

Limited visibility and insights: Management struggles to see contract performance, obligations, or risks clearly.

If any of these challenges exist, CLM software can help bring organization, control, and actionable insights to your contract processes.

What type of contracts can be managed using CLM software?

It can manage a wide range of contracts, including vendor agreements, NDAs, employment contracts, sales contracts, service-level agreements, lease agreements, partnership contracts, and more.

How does the CLM 365 save time for legal and business teams?

By automating approvals, reminders, and notifications, it reduces manual work and allows teams to focus on strategic tasks rather than repetitive administrative duties.

How does CLM software improve compliance?

A best CLM software helps your organization stay fully aligned with policies, regulations, and internal standards. By centralizing contracts and capturing all approvals, obligations, and key dates, it makes it easier to follow established rules consistently.

Does CLM 365 support electronic signatures?

Yes. CLM 365 integrates seamlessly with DocuSign, allowing contracts to be signed electronically in just a few clicks. This accelerates contract execution, reduces manual handling, and maintains legal validity. With e-signatures, teams can complete agreements faster, improve efficiency, and keep a secure, auditable record of every signed contract.