Introduction
Contracts are the backbone of every successful business relationship, from securing critical partnerships to ensuring smooth operations. But have you ever wondered what happens behind the scenes of a contract’s journey? From its inception to its eventual renewal or closure, every contract goes through a well-defined lifecycle that can make or break its effectiveness.
In today’s business world, understanding the key stages of Contract Lifecycle Management (CLM) is no longer optional—it’s a necessity. A strong CLM process keeps your agreements organized and helps you stay ahead of compliance issues, mitigate risks, and maximize value at every step.
So, whether you’re new to CLM or looking to refine your approach, let’s dive into the essential stages of a contract’s lifecycle and discover how you can manage them like a pro.
What Is Contract Lifecycle Management?
Contract Lifecycle Management (CLM) is your ultimate strategy for staying on top of every contract your organization handles. It’s the process of tracking and managing every aspect of a contract—from the moment it’s proposed or requested, through its execution and performance, and all the way to renewal or expiration. With CLM, you ensure that every contract fulfils its purpose, minimizes risks, and delivers maximum value.
Think of it as a disciplined, step-by-step approach that allows you to monitor performance, ensure compliance, and keep things running smoothly. Whether it’s delivering promised goods or services or deciding if it’s time to renew, CLM ensures that every stage of the contract lifecycle works like clockwork.
Businesses often turn to CLM systems to make this process even more effective. These tools—commonly contract management software—help you streamline the entire lifecycle. Some solutions cover every aspect of CLM, while others focus on specific stages for quick and affordable fixes. For instance, tools like ContractWorks simplify tasks such as signing, storing, and monitoring corporate agreements so you can spend less time on paperwork and more on driving results.
No two businesses are the same, and neither are their CLM needs. That’s why choosing a solution that aligns with your unique challenges, goals, and budget is important. With the right tools and a solid CLM strategy, you’re not just managing contracts—you’re setting your organization up for long-term success.
Let’s now understand the different stages involved in contract lifecycle management.
Also Read: Defining the Daily Roles and Skills of a Procurement Category Manager in 2025
Stages In Contract Lifecycle Management
Every stage of the Contract Lifecycle Management (CLM) process plays an important role in how contracts are managed and executed. While some steps have traditionally received more focus—such as contract template management—new technologies like artificial intelligence and machine learning have shifted attention to post-execution management. These advancements have made it easier to speed up processes, reduce risks, and make the most of your contracts.
Let’s explore each stage of the CLM process and see how the right tools can simplify and improve contract management.
1. Template Authoring
A well-organized contract template library can save you time and reduce risks. By setting up clear rules for template selection, you can ensure your contracts follow consistent standards. With smart tools, you can pull pre-approved clauses into your documents, add custom text, tag key information like metadata or annexures, and maintain a structured approach. Any new templates can go through an approval process before being used, so you always stay in control of the content.
2. Contract Creation
This stage involves putting the contract together using templates and pre-approved clauses. Modern CLM tools allow contracts to be automatically created based on specific details like region, products, or price terms. Some systems even let you create contracts without much manual input, especially if they’re integrated with tools you already use, like CRM or procurement software.
By simplifying this step, businesses can reduce the time it takes to finalize contracts, improve operational efficiency, and cut down legal costs.
3. Contract Negotiation
Negotiation is about finding terms that both parties agree on. A good contract should outline expectations clearly and include plans for handling potential breaches.
The process often starts with a draft contract, which the other party reviews and provides feedback on. This back-and-forth can happen through meetings or online communication. Setting deadlines for negotiations can keep things moving and help avoid unnecessary delays.
With modern CLM tools, you can manage redlines, speed up reviews, and stay informed about changes. Playbooks with pre-set language options can help your team negotiate with confidence, ensuring terms align with your goals.
4. Contract Review
Reviewing contracts ensures they support your business objectives. You can capture and enforce important terms through automated systems, such as pricing, discounts, and incentives. By integrating this data with other systems like finance, you can ensure compliance and streamline the settlement process.
Workflows make the review process straightforward, allowing you to check for compliance before the contract moves forward.
5. Contract Approval
Getting a contract approved can sometimes feel like a bottleneck, but smart workflows can make it much faster. Automated processes route contracts to the right people for approval, whether it’s sequential or parallel approvals. If any changes are made during negotiations, the workflows adjust automatically, ensuring nothing gets overlooked.
You can also set rules for who needs to approve what, keeping the process transparent and efficient.
6. Contract Execution
Gone are the days of signing contracts with a pen and paper. Now, you can sign agreements digitally from anywhere. For example, integrations with platforms like Adobe Sign let you send, sign, and save contracts securely, all in a few clicks.
Even manual signature workflows are easier, with features like QR codes to validate signed documents. Once signed, contracts are updated in the system, so you have an accurate record.
7. Contract Operation
Once a contract is signed, ensuring everyone understands their responsibilities is important. For example, if a payment is due in 30 days, the accounts payable team needs to know about it.
During this stage, the key terms and conditions are communicated to the right people within your organization. This includes details like payment terms, purchase orders, and volume agreements. Proper documentation and communication prevent misunderstandings and keep everything on track.
8. Contract Performance
This stage focuses on ensuring that the contract delivers what it promises. Previously, managing this step was challenging because contracts often contained complex language. However, with AI-powered tools, this is no longer an issue.
These tools analyze contracts and provide insights into performance metrics like cycle times, savings, risks, and contract revenue. They also help track tasks assigned to team members, ensuring meeting commitments.
Risk management becomes more effective as you can monitor financial, performance, and third-party risks using internal and external data.
9. Contract Expiry or Renewal
The final stage is preparing for a contract’s renewal or closure. Alerts and notifications can remind you when a contract is about to expire, giving you enough time to assess its performance and decide on the next steps.
Renewals offer a chance to renegotiate terms, lock in favorable rates, or make other improvements. With clear insights into how the contract has performed, you can decide whether to renew or end the agreement.
Each of these stages is crucial to managing contracts efficiently. By using tools that simplify these processes and provide real-time insights, you can ensure your contracts are always working in your favor—saving time, reducing risks, and driving better outcomes.
Also Read: Strategic Sourcing Strategies: Top Examples and Processes
How Can akirolabs Help With Contract Lifecycle Management?
Managing contracts effectively is essential for improving procurement processes and building strong supplier relationships.
Here’s how our platform supports you:
- Centralized Contract Information
Keep all contract details—supplier names, contract IDs, key dates, and payment terms—organized in one place for quick access and better visibility. - Timely Renewal Planning
Track contract expirations, allowing you to focus on high-value agreements and prepare for renewals or renegotiations ahead of time. - Clear and Actionable Insights
View real-time data and visual reports to identify risks, strengthen supplier relationships, and align contracts with procurement strategies. - Seamless Integration with Procurement Goals
Ensure contracts support category objectives and broader business priorities by making contract oversight a key part of your procurement strategy. - Consistent Compliance Monitoring
Track contract terms, conditions, and performance metrics to ensure financial and operational objectives are met.
With akirolabs, your procurement becomes a structured and strategic process, bringing greater control, efficiency, and long-term value to your organization.
Also Read: Top 15 Global Procurement Events for 2025
Conclusion
Effectively managing the key stages of the Contract Lifecycle Management (CLM) process is essential for businesses looking to unlock the full potential of their contracts. From creating templates and negotiating terms to monitoring performance and handling renewals, each stage contributes to reducing risks, improving compliance, and maximizing value.
Organizations can transform CLM into a strategic advantage with modern technology, like AI-driven insights and intuitive workflows offered by platforms such as akirolabs. By automating processes, fostering collaboration, and providing real-time analytics, akirolabs ensures that your contracts work smarter for your business, saving time while driving growth.
Ready to take control of your contracts and turn them into strategic assets? Start your journey with akirolabs today. Book a demo now!
