Let’s face it: most organizations handle contracts on a regular basis. Without the right tools to help you manage these documents (and their entire lifecycle), things can get complicated quickly.
The answer? Contract lifecycle management software.
Regardless of what department you’re in, whether it’s legal, HR, or sales, contract management tools will help you smooth out your team’s workflows and make contract management a lot simpler.
In this article, we’ll cover the ins and outs of contract lifecycle management software, including what it is, what it does, how it helps, and more.
What is contract lifecycle management software?
Contract lifecycle management software (CLM software) is a tool that helps you manage contracts throughout their entire lifecycle. That means from the initial request to contract renewal or even termination.
CLM software can automate and organize your contracts when it comes to creation and execution—plus, it can help your teams collaborate better and more efficiently. This will reduce risks (think: mistakes on important agreements) and make sure that your contracts are compliant with all necessary standards.
The best contract management software will simplify your entire contract process from start to finish.
What is the contract management lifecycle?
The end-to-end journey a contract takes at your organization is what we call the contract management lifecycle.
Each stage involves different stakeholders, documents, and actions.
The contract management lifecycle stages include:
- Initial request for a contract
- Authoring/creation of the contract
- Negotiation and collaboration
- Review and approval of contract terms
- Execution of the contract
- Obligations management
- Expiration and/or renewal of the contract
- Amendment of the contract
Here’s our full guide to the contract lifecycle management process so you can explore the stages in more detail.
What does contract lifecycle management software do?
CLM software gives you the power of an efficient, automated contract workflow. That means no more traditional, manual processes that are fragmented and disorganized.
When it comes to deciding which CLM tool to use, it’s key to choose one with the features that matter most.
Why do you need a CLM?
In business, especially in SaaS, contracts are a given. However, managing them with a manual, outdated process adds risk while wasting valuable time.
A contract lifecycle management solution can help you:
- Speed up turnaround time and contract execution
- Improve compliance and reduce legal risk
- Enhance collaboration
- Improve transparency
- Strengthen audit trails and reporting
- Gain better control over your contract review and renewal process
The right CLM solution is a must-have if you want to optimize your contract process and reduce friction.
Looking for ways to implement SaaS contract management in your business? Check out our handy guide here.
What is the difference between a CRM and CLM?
With similar-sounding acronyms, it can be easy to confuse the two terms. Customer relationship management (CRM) tools and contract lifecycle management (CLM) tools both deal with various business relationships, but they serve two distinct purposes.
Here’s a quick breakdown:
So, while CRM tools help to manage relationships and customer data, CLM software is used to manage documents that put those relationships into writing.
Contract lifecycle management software features
Here are the essential contract lifecycle management software features and what they do:
1. Template and clause library
Pre-built templates and clause libraries allow you to draft contracts quickly and accurately. This reduces legal risk and keeps language consistent and compliant, all while making the process more efficient.
2. Workflow automation
CLM software means no more manual oversight. You can set up automated approval workflows, notifications, and reminders to sign contracts and direct documents to the right people, preventing unnecessary delays.
3. Real-time collaboration
All parties involved in the contract, whether internal or external, have the ability to review, edit, and comment on contracts at the same time. This means everyone remains aligned, as changes and version histories are visible to all parties.
4. eSignature integration
You can finalize agreements at lightning speed with secure, legally binding eSignatures. These are built directly into the contract process without the need for special tools.
5. Centralized contract repository
A contract repository is great for providing a searchable, centralized location to store all contracts. With advanced tagging and retrieval features, you can quickly and easily access any document when you need it.
6. Reporting and analytics
Being able to see things like the status, cycle times, and renewal rates is valuable information for your contract management strategy. A good CLM software should offer built-in dashboards and contract analytics to give you the visibility you need to prevent bottlenecks and take advantage of opportunities.
7. Alerts and reminders
With a contract workflow, it’s important to stay on top of renewals, expirations, and deliverable deadlines. Your CLM platform should have customizable alerts that warn you about penalties, missed or upcoming deadlines, and opportunities.
8. Audit trails and compliance tracking
It’s important to keep a complete record of any edits, approvals, and signatures for any given contract. This helps make sure contracts are compliant while minimizing legal exposure, also coming in handy when it’s time for an audit.
At the end of the day, CLM software gives you the structure, visibility, and control over your contract processes so your teams can stay focused on key tasks.
Still need convincing that CLM software is the way to go?
PandaDoc’s contract management software can help to increase the speed and accuracy of your deals, from creation to renewal. You can create, collaborate, manage, and eSign contracts with just one tool.
Plus, you’ll improve your productivity with automated contract drafting and editing features as well as pre-approved, customizable contract templates, so your contracts can come together fast and error-free.
Just ask our client, Poll Everywhere, who achieved up to 66% faster renewals with PandaDoc software.
“PandaDoc completely transformed how we handle renewals. It’s gone from being a ‘nice-to-have’ to an absolute must-have.”
– Chase King, Customer Success Ops Manager at Poll Everywhere
Want to dive deeper into contract management? Check out our best practices for making your contract management successful.
Simplify your contract management process
By implementing a CLM system, businesses can achieve several key benefits:
- Speed: Accelerate contract creation, approval, and execution processes, driving quicker deal closure and reducing time-to-revenue.
- Scalability: As your business grows, your contract needs will scale too. CLM tools make managing an increasing volume of contracts easier and more efficient.
- Compliance and risk management: Automated reminders, audit trails, and centralized data help you stay compliant and actively manage risks.
A contract management system helps users organize contracts, reduce unnecessary manual work, and simplify the contract process so you can scale more efficiently as your business grows.
See how PandaDoc can help you automate and organize your contracts and help your team work faster and more efficiently. Start your 14-day trial today!
Disclaimer
PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDoc services are governed by our Terms of Use and Privacy Policy.
