There's no doubt that contracts play a critical role in business. In fact, around 70%-80% of businesses are governed by contracts.
With our lives revolving around contracts and documents to create, sign, and store—let’s talk about the common obstacles found along the way.
Here are 10 challenges in contract management along with statistics and possible solutions to overcome them.
Table of contents
1. Time-consuming manual processes
2. Big number of documents to sign
3. Negotiations back-and-forth
4. External collaborations
5. Lack of responsibility and poor cross-department collaboration
6. Costs and possible fines
7. Storage, lost documents, and trouble finding them
8. Following contracts
9. Tracking and scaling
10. Understanding clauses
1. Time-consuming manual processes
Without a doubt, the time-consuming manual processes remain one of the biggest challenges for proper contract management.
To put this issue into perspective, companies take an average of 20 to 30 days to create, negotiate, and finalize a contract, while renewing a contract takes an average of 97 days.
Some key issues here include:
- Time-consuming tasks: from drafting to reviewing, and approving contracts manually, which all slows down operations.
- Focusing on low-value contracts without automation: without automation, teams spend excessive time on routine contracts instead of high-impact agreements. 84% of contracting professionals are under pressure to simplify agreements, suggesting that current manual processes lack standardization.
- No standardization: speaking of which, no standardization for repetitive tasks, contracts, and workflows leads to confusion, compliance risks, negotiation difficulties, and even more time wasted.
💡 Solution
There are a few possible solutions you could implement to deal with inefficient manual processes, but they can be reduced to two main ones: automation and standardization.
Whether you decide to implement a contract lifecycle management (CLM) or a contract management software to automate contract creation, approval workflows, and data entry or invest in an electronic signature software to help with mass signing, digitalization of signing processes—you’ll automate some part of your work.
When it comes to standardization, it may be closely related to automation of tasks and workflows.
For example, if you decide to implement an electronic signature software, like Autenti, you’ll not only automate your document signing processes, but also standardize them.
Check how TZMO reduced their contract processing time by up to 90%, signing documents in 30 hours or less with Autenti.
2. Big number of documents to sign
It’s no secret that organizations deal with a lot of contracts, making signing and execution overwhelming.
When it comes to signing a big number of documents, the challenges include:
- Delays in contract execution: handling contracts manually for a large number of vendors, clients, or employees may cause delays, and in turn—lost money.
- Errors in bulk signing: when signing tons of documents the traditional way, a mistake or two is bound to slip in.
- Lack of scalability: and lastly, directly connected with the first point we’ve made about manual processes—manually signing a big number of documents without automation also works against scalability.
💡 Solution
The best solution here is to use e-signature tools, like Autenti, and automate mass signing of contracts the easy way.
Signing documents with one click vs leaving hundreds of traditional signatures on paper paints the picture well enough.
3. Negotiations back-and-forth
Negotiating contracts is often complex, with challenges such as:
- Time-consuming back-and-forth: multiple revisions and stakeholder approvals extend the process.
- Disagreements on terms: legal teams, procurement, and vendors often have conflicting priorities.
- Version control issues: without centralized document management, teams may work on outdated contract versions.
💡 Solution
The automation of contract management processes can accelerate the negotiation cycles by half.
The natural solution to the challenge of negotiations seems to be yet again, automation.
With automated contract workflows, you’ll ensure working on the right version control and, in turn, speed up negotiations.
Speaking of version control—it’s good to keep track of it, especially in the negotiations back-and-forth phase.
To prevent creating alternative versions and chaos, you can use the Autenti platform, which allows you to always work with the latest version of each document and gives you full control over who signed it and when.
So, even if a given contract already has some signatures added, you can still add more on the same document with Autenti. After a document is signed, it’s automatically delivered to the next recipient if you add them.
4. External collaborations
Managing contracts internally is a challenge in itself.
Managing contracts involving external parties (vendors, clients, partners) is a whole other thing, connected with:
- Lack of visibility: organizations may have limited insight into external contract workflows, and therefore, struggle with visibility.
- Security risks: sharing contracts via email or unsecured platforms exposes sensitive data.
- Slow response times: external stakeholders may delay contract execution.
💡 Solution
Implementing an electronic signature software directly helps in dealing with external collaborators and contract management. From uploading and sharing the documents to identity verification, signing and storing.
Review a real-life example of Medicover who relied on traditional, paper-based methods for signing agreements, face-to-face meetings, and physical delivery of documents.
The company opted to implement Autenti and switch to electronic document signing from the traditional paper methods.
Key points that made the decision to choose Autenti natural were:
- The encryption of documents,
- Quick contract signing,
- One centralised location for archived documents,
- Easy monitoring of signatures status.
With that change, Medicover reduced their contract signing time from two weeks to just one day, now signing nearly all of their sales documents electronically.
But what’s most important it’s also their external partners—in this case customers—who appreciate the change the most, being greeted with an efficient contract implementation process.
5. Lack of responsibility and poor cross-department collaboration
Going back to the internal challenges.
When multiple departments handle contracts, possible headaches may come from:
- No clear ownership: uncertainty about who is responsible for contract compliance, renewals, or performance monitoring causes chaos, time issues, delays, and more unnecessary troubles.
- Siloed teams: legal, procurement, finance, and sales often work in isolation, leading to miscommunication.
💡 Solution
A possible solution for this particular contract management challenge is to assign owners for each area, establish clear and standardized workflows, and use a good team collaboration platform to make sure everyone’s on the same page with each document created and signed.
6. Costs and possible fines
Within the last few years, the average cost of a low-risk contract from authoring to signature has increased by 38%.
But the costs of managing contracts are not in just creating and signing the documents. Any business that has at least a thousand employees spends around $2.5-$3.5 million on searching or recreating lost documents.
And the costs don’t end there.
The legal costs and fines can also come in millions. Like for Google, when the company received a 50 million EUR penalty in 2019 in accordance with the General Data Protection Regulation (GDPR), for lack of transparency, inadequate information and lack of valid consent regarding the ads personalization.
💡 Solution
Automate deadline tracking and compliance checks with contract lifecycle management (CLM) tools and a good legal time by your side.
7. Storage, lost documents, and trouble finding them
As much as 71% of companies cannot find 10% or more of their contracts, which naturally leads to even more issues.
Without a centralized contract repository, organizations struggle with missed deadlines, compliance issues, and financial risks, on top of a lot of time wasted looking through the archives.
💡 Solution
Use a cloud-based contract repository with searchable metadata and access controls for better security and retrieval.
If you decide to turn to digital contract signing with Autenti, each signed document will be safely stored on your account and easily searchable in the future.
Plus, you’ll have the opportunity to finally get rid of those physical files.
8. Following contracts
Once a contract is signed, companies often struggle to ensure obligations are met. Vendors or partners may not comply with contract terms and it’s definitely a challenge to enforce that.
In fact, 70% of contracts are not adhered to by business units.
💡 Solution
With this particular challenge, there are again a few solutions you could try.
For one, you can implement contract tracking software with automated alerts and reporting tools.
For two, you can monitor contract success with key performance indicators (KPIs).
And lastly, you can try and enforce penalties for failure to follow up on contract terms.
9. Tracking and scaling
What may come as a surprise or not, only 22% of businesses are confident in the tracking and managing of their contracts, which is a common contract management challenge.
Companies fail to track:
- Key dates (renewals, expirations, milestones), leading to unintended auto-renewals or lost business opportunities.
- Obligations and SLAs (service level agreements), causing compliance risks.
- Amendments and changes without proper documentation.
💡 Solution
The best solution for experiencing challenges with tracking is to start at the basics and set proper KPIs first.
Then, using software or manually—track the KPIs and measure what works, what doesn’t, and where do you see an opportunity to scale.
10. Understanding clauses
The very last challenge we want to cover is one, which may seem a bit more sublime, but one that remains a big issue in contract management—understanding the contracts.
Legal language can be complex, leading to:
- Misinterpretation of obligations: employees or stakeholders may misunderstand key terms.
- Risk exposure: vague or unfavorable clauses may create financial or legal liabilities.
- Inconsistencies across contracts: lack of standardized clauses increases risk.
In fact, as many as 90% of professionals admit that business contracts are difficult for them to understand or they can’t understand them at all.
💡 Solution
For making sure everyone on the team stays on the same page and understands the contracts you’re using, you can:
- Use AI-powered contract analysis tools to identify risks and suggest standardized clauses—as long as you’re sure the tools are safe to use and don’t feed it any sensitive data.
- Create a glossary with the help of the legal team to explain commonly appearing terms and conditions.
- Educate the team on the most common cases.
Save yourself the headache when signing, sharing, and storing contracts. Try Autenti for free.
