An Overview of Contract Management Software and the Best Tools in 2024

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An overview of contract management software

Contract management software is a tool designed to streamline and optimize the management of contracts throughout their lifecycle — from creation and negotiation to execution, renewal, and beyond. For example, they may provide templates to inform and expedite the drafting of complex agreements.

Most critically, these tools serve as a centralized repository for contracts, which helps organizations better track and monitor their active agreements, as well as automate various aspects of the entire contract lifecycle. They improve communication between both internal and external teams around contract management.

This enhanced communication is key, as it opens the door to better collaboration, which can improve efficiency, reduce risk, and ensure compliance — all critical characteristics of any business worth its salt.

Most Purchased Contract Management Software

According to Vendr's most recent internal transaction data, Cacheflow is the leading software in the Contract Management Software category, closely followed by Ironclad, LinkSquares, Conga, Juro, and PandaDoc.

Most Renewed Contract Management Software

Vendr's internal transaction data indicates that Ironclad is the most renewed Contract Management Software with Conga, PandaDoc, LinkSquares, Juro, and Cacheflow closely behind.

Most Recently Purchased Contract Management Software in 2024

Vendr's most recent 2024 internal transaction data reveals that Ironclad is the most recently purchased contract management software followed by LinkSquares, PandaDoc, Conga, Cacheflow, and Juro.

Who can benefit from using contract management software?

Here are some examples of the use cases that contract management software enables for specific teams:

• Legal departments: With contract management software, legal teams can efficiently draft, review, and negotiate contracts — as well as track contract changes, manage version control, and ensure legal compliance.
  
• Procurement departments: Procurement teams can streamline the procurement process with contract management software, making initial negotiations (as well as monitoring renewals) with vendors much easier.
• Sales teams: Contract management software helps sales professionals track sales agreements, manage customer contracts, and monitor for renewals and upsells all in one centralized contract repository.
• Finance and accounting teams: Finance teams can track payment terms, billing schedules, and revenue recognition associated with contracts. They can also reconcile contract data with financial records, generate invoices, and ensure accurate financial reporting.
• Compliance and risk management teams: Compliance teams can monitor regulatory requirements and track a contract’s adherence using contract management software. Meanwhile, risk management teams can identify and mitigate contractual risks, monitor contract performance, and enforce risk mitigation strategies.
• Decision-makers: Executive leaders can gain visibility into their organization’s active contracts, allowing them to assess risk and keep tabs on new business contract developments and contract profitability — which informs better decisions.

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Features to look for in contract management software

The best contract management software will have the following critical features:

• E-signature.
• Approval management.
• Renewal management.
• Contract analysis automation.

E-signature

E-signatures enable users to sign contracts and other documents with an electronic signature, which eliminates the need for a physical signature and reduces reliance on slow, paper-based processes. By making the signature process digital, e-signatures accelerate the contracting process and enable faster contract execution.

Approval management

Approval management helps enhance efficiencies around the various approval stages that contracts must go through — which are a common bottleneck in the contract lifecycle. When contract management software enables better approval management, organizations can enact clearer accountability by assigning specific roles to each part of the approval process (such as sign-off and authoring), as well as gain better visibility into the status of contract approvals. A streamlined approval system can also help optimize contract review and better facilitate the onboarding process.

Renewal management

Deadlines can creep up on any organization quickly. A contract management solution that enables rigorous renewal management helps prevent the costs (in both time, money, and resources) incurred by missing critical contract deadlines. Keeping an eye on renewal can also help streamline possible contract negotiations ahead.

Contract analysis automation

Contract analysis automation leverages the power of AI and ML to comprehensively digest large volumes of documents in a short amount of time. As such, organizations can gain deeper insights and have a better grasp on the details of even the most extensive and complex contracts quickly — enabling them to make better business decisions with greater efficiency.

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Signs your company needs contract management software

While a smaller volume of active contracts may be manageable without tools, growth in the current business landscape is highly unlikely without increasing the number of agreements your organization enters. Here are the telltale signs your teams might be in need of contract management software:

• Frequent contract errors or delays: If you often encounter errors or delays in contract processes such as drafting, review, approval, or execution, it may indicate the need for contract management software.
  
• Increasing complexity of contracts: Contract drafting can become more complex and extensive over time, which requires additional scrutiny and analysis. This can make manual management nearly impossible.
• Challenges in maintaining compliance: Highly regulated industries face complex compliance requirements, which means manual contract management systems will likely lead to compliance gaps or oversights. The right management platform can enforce standardized processes, track regulatory changes, and ensure adherence.
• Lack of centralized contract data storage: If contract documents are scattered across multiple systems, folders, or shared drives, retrieving and managing contracts becomes inefficient and time-consuming. Contract management software provides centralized storage and organization of contract documents, enabling easy access, retrieval, and collaboration among stakeholders.
• Inefficient approval workflows: Significant bottlenecks at the approval stage can indicate a lack of visibility, communication, and collaboration between essential internal and external stakeholders. Contract management software can help specify accountable parties and enhance visibility into where each contract sits in the approval process.
• Desire for scalability and growth: If your organization is experiencing growth or expansion, manual contract management organization will quickly become unsustainable. Contract management software can scale with your organization's needs, ensuring efficient contract management processes as you grow.

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Checklist for choosing the right contract management software

Investment in any tool should be a carefully considered, data-backed decision. Asking these questions before buying will help you choose the best software for your organization.

1. Identify your organization’s needs and objectives

Determine the key functionalities that your organization needs to successfully manage its contracts throughout their entire lifecycle. For example, will you need to scale the software quickly as the business grows?

2. Assess software for integration capabilities

Contract management software won’t be the only tool in your tech stack. Assess the tools you’re considering for compatibility and integration capabilities with other solutions already in play, and those you may adopt in the future.

3. Compare reporting and analytics features

Check if the software offers reporting and analytics capabilities that help your teams gain insights into contract profitability, risks, and opportunities. You’ll want a tool with customizable reports, dashboards, and real-time analytics, all wrapped in a user-friendly interface.

4. Verify features for compliance management

Contract management software should ideally knock out two birds with one stone by making contract management and compliance easier. Check potential solutions for features like automated compliance checks, notifications, and regulatory updates.

5. Evaluate the software’s capabilities across the entire contract lifecycle

Organizations should aim to get the best contract lifecycle management software, not a tool that handles only one or two parts of the entire process. Identify the solutions that work from contract creation to contract renewal, and beyond.

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Contract management software FAQs

Can you use a CRM for contract management?

Customer Relationship Management (CRM) tools can be used for some level of contract management, but they inherently cannot provide the depth of features and functionalities held in a dedicated contract management platform.

Which businesses need contract management software?

All businesses can benefit from contract document management. Any organization, from small businesses to large enterprises, should consider investing in an intelligent, centralized tool for contract management.

How much does contract management software cost?

The price of contract management software varies depending on the pricing system and organization size, among other factors. On Vendr’s platform, the average contract value (ACV) for contract management software is $44k.