Key contract management best practices
Effective contract management best practices rely on understanding the full contract lifecycle. From creation to renewal, these practices help create more consistent and controlled processes. For a full introduction to contract lifecycle management, see Contract Lifecycle Management: A Practical Guide.
1. Efficient contract creation: Reduce errors and save time
The contract creation phase often presents bottlenecks. A key best practice is to streamline drafting by using standardized processes and tools.
Many organizations use contract management software to support contract creation, enabling more consistent drafting and reducing reliance on manual processes. This often includes the use of contract templates and structured workflows. For a deep dive into templates specifically, see Contract Templates: A Practical Guide for Legal and Business Teams.
This can include:
- Standardised contract templates: Pre-approved templates help reduce errors and ensure consistency
- Structured data input: Guided questionnaires can help capture key contract details such as counterparty, jurisdiction, and commercial terms
- Controlled clause usage: Standard clauses and fallback options help maintain alignment with internal policies
2. Seamless approval and execution: Reduce delays
The approval and execution phases often experience delays due to unclear responsibilities and fragmented communication.
To improve this:
- Define clear roles: Ensure that each contract type has clearly assigned approvers
- Use structured approval workflows: Route contracts to the right stakeholders based on defined rules
- Improve visibility: Ensure all stakeholders can see status and progress
To support execution:
- Use integrated e-signature solutions: These can help reduce the time required to finalise agreements
- Track signing status: Ensure all parties are aligned throughout the execution phase
For more on how e-signatures integrate with CLM, see How eSignatures Fit Into Contract Lifecycle Management.
3. Organised storage and compliance: Improve access and control
A core principle of contract management best practices is centralised storage. Scattered or poorly stored contracts can lead to inefficiencies and compliance risks.
Instead, organisations should aim to:
- Maintain a centralised contract repository: A structured and searchable archive makes it easier to find and manage contracts
- Apply permission-based access: Control who can view and edit contracts
- Ensure traceability: Maintain clear records of changes, approvals, and decisions
For more on what governance means in practice, see Contract Governance: What Control in CLM Actually Means.
4. Renewal and lifecycle management: Avoid missed opportunities
Contract renewals are a significant source of missed value. Without automated tracking, contracts auto-renew on unfavourable terms or lapse without review.
Best practices include: setting automated reminders 60–90 days before key dates, assigning a clear owner to each contract renewal, and building renewal review into standard contract metadata at the drafting stage.
5. Data and reporting: Turn contracts into insights
The data inside your contracts is a strategic asset. Organizations that treat contracts as structured data — rather than documents — can report on obligations, identify risk exposure, and track commercial performance across their portfolio. For more on this, see The Contract Is Not a Document. It Is a Strategic Asset.
