Contract management is a critical yet often underestimated function in most organizations. Every contract represents a business relationship with obligations, deliverables, deadlines, and risks. Managing them effectively means staying on top of every detail. Doing it poorly can mean missed opportunities, compliance failures, or costly disputes.
As companies grow, so does the complexity and volume of their contracts. The question isn’t whether you need to manage contracts better — it’s how.
Here are six top contract management challenges businesses face — and practical solutions to overcome them.
1) Time-Consuming Contract Creation
Drafting contracts takes time, especially when each one must be customized, legally sound, and aligned with business goals. Starting from scratch or hunting for the right clauses slows everything down.
Solution:
Use standardized templates and pre-approved contract clause libraries within a CLM system. This reduces drafting time, ensures consistency, and lowers the risk of missing key terms.
2) Errors and Missing Obligations
Errors in contracts can happen easily: missing terms, inconsistent language, or incorrect data entry. These mistakes lead to misinterpretation, delays, or disputes — often only discovered when it’s too late.
Solution:
Implement contract review checklists and leverage automated validation tools. Many CLM platforms offer clause-level intelligence that flags errors or inconsistencies during drafting and negotiation.
3) Poor Visibility and Tracking
Manually tracking contract status, milestones, and versions is inefficient and unreliable, especially when documents are scattered across inboxes, spreadsheets, and shared drives. This lack of visibility leads to bottlenecks and missed deadlines.
Solution:
Centralize all contracts in a digital repository with role-based access. Real-time dashboards and automated reminders ensure teams know exactly where each contract stands and what’s required next.
4) Managing Amendments and Compliance
Contracts change, especially long-term ones. Managing amendments manually can result in confusion over which version is current. Meanwhile, staying compliant with new terms or regulations becomes harder over time.
Solution:
Use a CLM platform that tracks all changes, links amendments to original terms, and alerts stakeholders when updates impact compliance or performance. Structured workflows ensure accountability throughout the lifecycle.
5) High Operational Costs
Contract oversight typically spans legal, procurement, finance, and operations. Without streamlined systems, teams duplicate effort, miscommunicate, and waste hours coordinating across departments.
Solution:
Automated approval flows, centralized access, and collaboration tools reduce redundancy and lower the total cost of contract management, freeing up teams for higher-value work.
6) Missed Deadlines and Renewals
Missing a contract renewal date or key obligation can lead to service disruption, financial penalties, or even contract termination. Relying on manual reminders simply isn’t scalable.
Solution:
Leverage automated alerts for renewal windows, key deliverables, and compliance checkpoints. Smart CLM platforms allow users to configure notifications based on contract type, priority, or owner.
Final Thoughts
Contract management challenges are real and increasingly complex. But they’re also solvable. With the right tools and workflows, companies can turn contract management from a risk into a competitive advantage.
By adopting structured processes — and smart platforms designed to support the full contract lifecycle — organizations can reduce risk, boost performance, and stay compliant across the board.
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Source: 6 Top Contract Management Challenges and Their Solutions
