Best CLM Software: Manage Contracts Efficiently

January 23, 2026

6 min read

The CLM software helps businesses create, review, approve, sign, and manage contracts from a single, secure system.

In enterprise environments where contracts involve legal, sales, finance, and vendors, manual processes often lead to delays, missed obligations, and compliance risks.

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Quick Read

Summary generated by AI, reviewed for accuracy.

CLM 365 was built specifically for teams using Microsoft 365 who want greater control over their contracts without switching tools or disrupting existing workflows. It allows organizations to manage the entire contract lifecycle directly within familiar Microsoft applications.

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In real-world contract operations, enterprise CLM software brings structure, automation, and visibility to every stage of the contract lifecycle based on implementation experience across contract-heavy teams.

This guide defines what CLM software is, how it is applied in real-life, and why the contemporary organizations cannot afford to manage contracts without it to handle them effectively and at scale.

What Is CLM Software?

CLM software is a tool that deals with contracts throughout the initial request to renewal or termination. It unifies all the activities like drafting, viewing, approvals, contract signing, tracking and reporting under one controlled environment.

In the case of expanding companies and controlled businesses, CLM software is not merely a document application. It is a system that links legal, finance, procurement, sales and leadership teams with a common contract process.

How CLM Software Works Across the Contract Lifecycle

CLM software handles contracts in a well-defined process. The stages are structured in that the actions, decisions, and changes are documented.

1. Contract Request

Contracts can be requested by the user on the platform and allocated to the approver. The most important information like the type of contract, the parties involved, value, department, and timelines are recorded in the beginning providing legal teams with a clear background before they start drafting.

2. Drafting

After the approval of the request, the contract passes to the drafting phase. These templates are the common legal language that has already been checked by legal teams. The approach minimizes the use of manual document preparation and assists in ensuring uniformity of words used in similar contracts.

3. Review and Negotiation

Contracts are reviewed by legal teams’ assistance of AI in CLM software which assists in summaries and insights into clauses. Any edits and discussion are done in a secure system, and any change is tracked and previous versions can be accessed. The history of negotiation remains attached to the contract rather than being spread on files.

4. Approval

Once reviewed, the contract approval process will be automated in the CLM system. Contracts are diverted to the concerned departments according to the set regulations like the value of contract, department or risk. Approvers are notified within the platform and all approval activities are documented which forms a clear and traceable decision record.

5. Execution

After approvals are complete, the contract is now ready to be executed. CLM software facilitates electronic signing where parties can sign electronically. The signed contract is automatically stored in the central repository. The official record is the signed version and can be accessed any time easily.

6. Obligation Tracking

Once the contract has been executed, it is still active in the system. Critical requirements, milestones, payment conditions, and renewal dates are removed and monitored. The system provides notifications of upcoming deadlines or actions that are required. This assists the teams to remain conscious of duties during the contract period.

7. Renewal or Closure

The system sends real-time notifications to the concerned teams as their renewal dates approach. Every previous version and activity is documented to be reviewed and audited in future. This can assist teams in preventing missed contract renewal process and has a greater control of the current agreements.

Difference Between Traditional and Enterprise CLM Software

Traditional contract handling relies heavily on documents, emails, and shared folders. Enterprise CLM Software takes a system-driven approach designed for scale, governance, and visibility.

Key Differences at a Glance

Aspects	Traditional Method	Enterprise CLM Software
Contract Storage	Spread across emails and drives	Centralized, searchable repository
Drafting Method	Manual edits in documents	Template-driven drafting
Approval Process	Email-based follow-ups	Department based approval workflows
Version Control	Multiple copies with unclear history	Complete version tracking
Risk Identification	Manual legal review and consumes time	AI-assisted review process
Reporting	Limited or manual reporting	Real-time dashboards
Scalability	Difficult to manage at volume	Built for enterprise growth

Key Features of Enterprise CLM Software

Enterprise CLM software supports organizations that handle a high volume of contracts across multiple teams. Here are some key features to consider.

1. Centralized Contract Repository

Enterprise CLM software offers a safe and secure place where all the contracts are kept. All contracts are stored in a repository and metadata like the type of contract, the date of commencement and the date of expiration.

This enables users to find contracts fast through filters or by searching using keywords rather than going through folders.

The most recent version is always available to teams, eliminating the use of local files or shared drives.

2. Clause Library

The platform contains ready to use clause libraries that are run by legal departments. Such templates are in line with company policies and regulatory requirements.

Business users can choose the right template and clauses depending on the type of contract, whereas the legal teams can keep the language standards.

This method helps in maintaining uniformity in agreements and minimizes the re-writing of agreements.

3. Automated Workflows & Approvals

As per an EY study, while 70% of organizations have a formal contracting technology strategy, 99% still lack the data and tools needed to truly improve their contracting process.

Organizations have invested in contract technology and in many cases, they do not have the structured data to enhance their processes.
This can be solved with automated workflows that direct contracts along pre-defined approval paths.

All the steps are documented giving a clear picture of the status of the contract and the person in charge at every step.

4. Redlining & Draft Comparison

Enterprise CLM software comes with redlining and draft comparison features. Users do not need to switch between the different versions of a document to review the changes made in the system.

Tracking at the clause level indicates what changes have been made, when and who made the change.

Previous versions are still available, and the reviews are more organized and traceable.

5. AI-Powered Contract Review & Insights

According to Super Legal, reviewing a contract takes approximately 92 minutes on average.

AI-assisted contract review and insights assist teams to comprehend contracts more quickly and locate possible risks more precisely.

These features offer summaries of contracts, propose alternative clauses, detect risk language, and monitor obligations. As a result, legal teams will be able to minimize the number of manual reviews and concentrate on the strategic analysis.

5. Digital Signatures

The CLM software has the capability to sign contracts electronically using digital signature.

This reduces the duration of time required to sign agreements and enhances the signing process by all parties involved.

Contracts are automatically stored as official records once signed, and timestamps and signer information are maintained.

6. Obligation & Renewal Management

It supports contractual obligation by tracking approved contract terms, key deliverables, and renewal dates in one place.

Standardized clauses and controlled approval workflows help keep commitments aligned with company policies.

All activities are recorded, providing a clear audit trail while helping teams stay aware of deadlines, and upcoming renewals throughout the contract lifecycle.

7. Reporting & Contract Visibility

The system provides dashboards that display contract status, approval timelines, upcoming renewals, and risk exposure.

These contract visibility help leadership teams understand contract performance and trends.

They also support better planning by highlighting areas that require attention before they impact business outcomes.

8. Compliance Management

As per stats by Zoho Contracts, Compliance is also a major issue in all industries with 43% of the respondents citing it as their greatest challenge.

This highlights the growing need for structured contract controls and consistent policy application.

A centralized contract system helps teams follow approved standards, maintain clear audit trails, and reduce the risk of non-compliant agreements.

Benefits of Using Enterprise CLM Software

Enterprise CLM software supports organizations by bringing structure, visibility, and accountability to contract activities. These benefits extend beyond legal teams and help business, finance, procurement, and leadership teams work with contracts in a more organized and informed way.

1. Faster Contract Turnaround Across Teams

Contracts are taken through review and approval processes without wasting time.

The task is performed according to a set of rules, minimizing the time spent between work.

This assists the teams to deliver contracts on schedule and enhances the general coordination across the departments.

2. Clear Visibility into Every Contract Stage

Enterprise CLM software gives real time visibility of the status of every contract, request to execution and renewal.

Manual follow-ups are not needed to allow teams to monitor progress, duties, and future action.

This helps reduce delays and keeps all stakeholders aligned throughout the contract lifecycle.

3. Reduced Legal and Compliance Risk

The software can be used to mitigate this through the enforcement of approved templates, standard libraries of clauses and controlled approval processes.

All activities are recorded and this means that there is uniformity, adherence and audibility of contract management throughout the organization.

This makes it easier to demonstrate compliance during contract audits and internal reviews.

4. Cost Control

Increased transparency of pricing structures, payment terms and renewal cycles will allow more robust financial planning and budgeting.

Teams are also able to look ahead to the contract commitments rather than being caught up at the last minute.

This minimizes the chances of incurring unnecessary costs due to missed renewals, unfavourable terms or old-fashioned prices.

5. Improved Control During Negotiations

Structured clause libraries and version comparison tools bring clarity to every stage of contract negotiation strategies.

Teams can immediately what has changed, why it changed and how it affects the entire agreement.

This results in more targeted discussions, quicker approvals and a lot less reliance on manual document comparisons that take a long time to complete.

6. Easy Renewal Management

The automated renewal alerts make sure that teams are aware of the important dates of the contract early enough.

This will have enough time to review contract performance, renegotiate terms or terminate agreements that are not value adding.

As a result, contracts stay aligned with current business needs and long-term goals.

7. Better Decision-Making

Since contract reviews typically take more than an hour, quick access to accurate information is critical.

The CLM software displays the important data on the contract, summaries, and timelines at the beginning of the process, so that there is no necessity to go through long documents.

This will enable leaders to make quicker, more assured decisions based on dependable and current information.

Contract Management Challenges Without CLM Software

Here are the key challenges businesses face when they do not invest in CLM software, relying instead on manual processes and disconnected systems.

The following are the main challenges that businesses experience when they fail to invest in CLM software, and they use manual processes and disconnected systems.

Limited Contract Visibility
In case contracts are scattered in inboxes, shared drives, or specific systems, it is hard to find the most recent and correct version. Teams spent time on document search or use old versions. This invisibility may slow down the process and create the possibility of mistakes.
Delayed Approvals
In the absence of formal approval processes, the contracts tend to drag slowly through email chains and unofficial follow-ups. There is no clarity as to who is to do the next review or approval and this creates lack of clarity. Such delays can affect the deal timelines and general business momentum.
Missed Obligations
The manual process of monitoring obligations may be challenging, particularly when the amount of contracts increases. Renewals, expirations or notice periods can be overlooked without automatic alerts. This may lead to loss of money, renegotiation, or unexpected extensions of the contract.
Compliance Gaps
It is more difficult to make sure that all contracts are conducted according to the accepted standards and policies. The inconsistency of clause usage or their absence can remain unnoticed. In the long run, this raises risk in managing contract compliance and complicates and prolongs audits.
Reporting Difficulties
Generating reports and insights in the absence of a centralized system may need manual data collection and analysis. This is a time-consuming process that does not necessarily give accurate or real time information. As a result, leadership might not be visible to make informed and timely decisions.

CLM Software Use Cases by Industry

In all industries, the complexity and volume of contracts have been on the increase and contract management through a structured approach is critical in ensuring efficiency and minimizing risks. The following are industry-specific examples of how CLM software can deliver quantifiable value.

Legal
CLM software helps legal departments to manage contracts more efficiently, evaluate risk more precisely, and have audit-ready records. Standard work processes save time on turnaround and make sure that all agreements are of standard. This will enable the legal professionals to concentrate more on strategic advisory work.
Manufacturing
The software is used in manufacturing to manage contracts, pricing frameworks and delivery agreements in a clear manner. The teams become more visible on the obligations and enhancing relations with suppliers. This helps the production planning and cost control to become easier.
Supply Chain
The centralized contract access enables the supply chain teams to monitor the vendor agreements and performance milestones. Transparency on terms enhances accountability and prevents service interruptions. This consequently makes operations predictable and resilient.
Oil and Gas
The oil and gas industry benefits the advantage of organized management of complex and high-value contracts. CLM software makes sure that approvals, obligations and compliance requirements are recorded. This lowers the risk of operations and enhances governance.
Healthcare
Healthcare organizations can manage vendor agreements more effectively and assist with the strict compliance requirements. Regular contract management enhances transparency and lessens the administrative load. This helps teams to concentrate on the quality of services and patient outcomes.
IT Sector / SaaS
Client contract, renewal and subscription terms are managed at scale by CLM software used by technology and SaaS companies. Automated tracking assists in avoiding loss of revenue and enhances customer retention. Teams can have better understanding of contract performance and status of lifecycle.
Energy Utility
Energy utility companies deal with long term contracts where obligation and milestones are tracked. Centralized visibility makes sure that promises are fulfilled within long periods of time. It is also useful in assisting teams to actively manage risks and stay in compliance.

Recommended Reading: What Is Energy Contract Management and How it Benefits?

Best Practices for Building an Efficient Contracting Workflow

A well-defined contracting workflow helps organizations maintain consistency, accountability, and visibility across every stage of the contract lifecycle. Teams can develop structured processes by using the following best practices.

1. Standardize Templates Before Automation
The use of standardized templates will provide a stable base to build contracts and review. It minimizes language differences and assists teams to operate using familiar formats.

Leverage templates of standard types of contracts in the business
Incorporate pre-approved clauses that are in line with legal and policy requirements
Periodically update templates to incorporate changes in the business

2. Define Approval Roles Clearly
Each approval stage has a clear owner and this ensures that the contracts are not delayed. The teams are aware of who is accountable at each stage.

Allot approvers according to the type of contract, value or risk
Approval of the documents and lines of escalation
Keep track of approval status of all stakeholders

3. Track Obligations from Day One

The tracking of obligation is to started immediately a contract is signed. This assists teams to be conscious of commitments during the contract term.

Identify milestones, deliverables and deadlines early
Assign the duty of overseeing every obligation
Check-in on the status of review obligation on a regular basis

4. Use Reporting to Review Performance Regularly
Regular performance assessments will give a picture on the ways contracts are contributing to business objectives. This contract analytics assists in determining trends and areas of improvement.

Track contract schedules, renewals and compliance patterns
Compare real performance with agreed terms
Provide share reports to other teams to make informed decisions

5. Establish Clear Contract Ownership
Determining ownership is one way of ensuring that teams are responsible to every contract during its lifecycle. Follow-ups and actions are managed more uniformly when ownership is specified.

Assign a contract owner who will oversee important dates and requirements
The ownership of documents in the contract
Check ownership assignments on renewal or amendments of contracts

Assign a contract owner who will oversee important dates and requirements
The ownership of documents in the contract
Check ownership assignments on renewal or amendments of contracts

Why Use CLM 365 for Handling Contract Process

The CLM 365 is built on Microsoft environment and integrates SharePoint, MS Teams, Outlook, MS Word, and Copilot. The platform is supported by AI and in-built automation to facilitate the creation of contracts, review, and management of contracts across teams.

CLM 365 provides organizations with a more efficient and reliable way to manage contracts through the secure protection of data and a clean and easy-to-use interface.

How to Implement CLM 365 Into Your Existing System

Examine your existing contract procedure to determine delays, gaps, and manual procedures that slows work
Identify the tools that you currently use to draft, approve, communicate and store information to determine how CLM 365 fits in your workflow
Turn on CLM 365 and integrate it with Microsoft 365 to take advantage of every available feature
Connect it to Outlook, Teams, SharePoint, Microsoft Copilot, and the Word add-in to manage contracts within the context of familiar applications
Establish approval processes, role-based access, and enable notifications of important dates and contract milestones
Give your team simple instructions and real life examples to enable them to start fast
Monitor the usage of the track system and performance to determine what can be improved with time

Tip: CLM 365’s AI agent can scan contracts, point out risks, obligations, and key clauses, reducing the time needed for manual review.

Conclusion

Contracts define revenue, risk and relationships. Managing them through emails and folders limits visibility and control. CLM software provides structure, accountability, and insight across the contract lifecycle.

Begin a 14-day free trial of CLM 365 and learn about its main features that facilitate the contemporary contract operations.