The contracts process explained — and how to stop losing time in it

At a glance

Every organization runs on contracts, but for many, managing them is a drain rather than a driver of business. Drafts sit untouched, approvals bounce endlessly between departments, and renewals slip by unnoticed. Instead of fueling growth, contracts consume time and create friction.

The scale of the problem is larger than most executives realize. KPMG found that inefficient contract management can consume up to 40% of a contract manager’s time — time that could otherwise be spent on higher-value activities. Meanwhile, World Commerce & Contracting reports that contract cycle times average 3.4 weeks, with negotiation and approval stages creating the biggest slowdowns.

Understanding the contracts process — and where it typically breaks down — is the first step to reclaiming that lost time. This article explains the contracts process from initiation to renewal, highlights the hidden costs of inefficiency, and shows how orchestration platforms help businesses accelerate every stage. For the broader framework, see our complete guide to contract management workflow.

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Breaking down the contracts process

The contracts process is the series of steps that takes an agreement from idea to execution and beyond. The stages of the contract include contract requests, contract creation process, negotiation process, internal approval process, contract signature, executing contracts, contract performance, contract renewals, and contract termination. While every organization adapts it to their needs, most follow a familiar structure:

1. Contract requests and contract creation process. The process begins with contract requests, where information is gathered to initiate a formal contract. The contract creation process involves preparing, drafting, and authoring the contract, often from a template. Input is required from business stakeholders and legal teams to ensure accuracy.

2. Negotiation process and redlining. Internal and external parties collaborate to adjust terms during the negotiation process. Managing potential risks and maintaining version control are critical at this stage to avoid version chaos.

3. Internal approval process and compliance. Legal, finance, procurement, or executives review and confirm the contract as part of the internal approval process. Bottlenecks here can add weeks to the cycle.

4. Executing contracts: contract signature and sign contracts. Contracts are finalized by obtaining the contract signature, either digitally or physically, as part of executing contracts. Many businesses still struggle with external stakeholders who don’t have an easy way to sign contracts.

5. Monitoring contract performance, contract renewals, and contract termination. The contract is stored, tracked for milestones, and monitored for contract performance. Timely contract renewals and clear contract termination procedures are essential. It is important to track when a contract reaches its end to ensure proper closure.

When any one of these stages lacks structure, time is wasted and risks multiply. Relying on a manual process increases potential risks and inefficiencies.

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What is contract management?

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Definition of contract management

Contract management is the comprehensive process of overseeing legally binding agreements between two or more parties, from the initial stages of contract creation through to contract renewal or termination. This process encompasses a variety of activities, including contract negotiation, contract execution, and the ongoing management of contractual agreements. Effective contract management is essential for organizations seeking to minimize financial risk, maintain contract compliance, and ensure regulatory compliance with relevant laws and industry regulations.

By managing legally binding agreements efficiently, businesses can avoid costly legal disputes and maximize the value of their business relationships. Leveraging contract management software is a key strategy for streamlining the contract management process, as it automates routine tasks, improves visibility, and reduces the likelihood of errors or missed obligations. Ultimately, strong contract management practices help organizations safeguard their interests and achieve mutually beneficial agreements.

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Understanding the contract lifecycle

Overview of contract lifecycle

The contract lifecycle is the sequence of stages that every contract passes through, starting with a contract request and continuing through contract creation, contract negotiation, contract review, contract approval, contract execution, and ongoing contract administration, until contract renewal or termination. Each stage of the contract lifecycle plays a crucial role in ensuring that all parties involved are aligned and that the terms of the agreement are met. Managing contracts effectively throughout these stages helps organizations stay on the same page, avoid missed deadlines, and reduce the risk of non-compliance. Modern contract management platforms are designed to automate key milestones in the contract lifecycle, making it easier to track progress, manage contract data, and ensure that every contract receives the attention it requires. By understanding and optimizing each stage, businesses can streamline their contract management process and achieve better outcomes for all parties involved.

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Why businesses lose time in the contracts process

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Manual drafting

Without standardized templates, every contract begins from a manual process, starting from scratch. Teams reinvent language and formatting, leading to delays and errors.

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Inefficient contract negotiation

When the contract negotiation process takes place over email, negotiating contracts becomes challenging as redlines multiply. It is difficult to keep track of all the details during negotiations, and different versions circulate, creating confusion about which draft is authoritative.

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Approval bottlenecks

The internal approval process can stall when stakeholders don’t respond quickly. A contract might wait weeks for a single executive’s sign-off.

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Missed contract renewal

Spreadsheets or inbox reminders fail, leaving contracts to expire unnoticed. Businesses risk compliance breaches and revenue leakage. Using automated alerts can help prevent missed renewals.

Accenture reports that digitizing contract processes can cut cycle times by 50%, underscoring how much time is lost in traditional approaches.

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The hidden costs of an inefficient contracts process

Time isn’t the only casualty. An inefficient contracts process can create wide-ranging business risks:

• Revenue delays. Deals that sit in negotiation or approvals delay revenue recognition, sometimes pushing it into a new quarter.
• Compliance failures. Missing approvals or audit trails can trigger regulatory penalties.
• Damaged client trust. Clients interpret delays as disorganization, weakening relationships.
• Value leakage. Small concessions made during rushed negotiations add up. Unclear payment terms and contract terms can also contribute to value leakage. IACCM research shows that value leakage can reach 9.2% per contract.
• Staff burnout. Teams waste hours chasing signatures or reconciling versions instead of focusing on growth.

Effective risk management is essential to identify and mitigate potential risks in the contracts process.

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Real-world examples of the contracts process

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Procurement contracts

A global manufacturer handled hundreds of supplier agreements manually. Approvals sat in inboxes, renewals were tracked in spreadsheets, and version chaos was common. By orchestrating the contracts process, approvals were automated, renewals tracked centrally, and disputes reduced. Procurement cycle times dropped by 40%.

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Professional services agreements

A consulting firm found that client contracts routinely took 45 days to finalize. Clients became frustrated, and projects started late. After adopting workflow orchestration, approvals routed automatically, client participation was built in, and contracts executed in 20 days. Client satisfaction scores rose by 30%.

For another scenario focused specifically on negotiation, see our article on the contract negotiation workflow.

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The importance of contract execution

Contract execution marks a pivotal moment in the contract lifecycle, as it is the stage where all parties involved formally agree to the terms by signing the contract. A well-managed contract execution process is essential for ensuring that each party understands their obligations and that the agreement is legally binding. Typically, contract execution involves a thorough contract review and final approval before signatures are collected. Utilizing contract management software can significantly streamline contract execution by enabling automated approval workflows and supporting electronic signatures, which help accelerate the signing process and reduce the risk of errors. These tools also enhance contract compliance by ensuring that all necessary steps are completed and documented, providing a clear audit trail for future reference. By integrating contract creation, contract review, and contract approval into a seamless workflow, organizations can reduce turnaround times, improve the overall contract management process, and foster stronger, more reliable business relationships.

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What to look for in a contract lifecycle management solution

Modern contract challenges can’t be solved with spreadsheets or email. Businesses should evaluate platforms that provide:

Automation for routing, reminders, and renewals.
Client-facing access so external parties can participate securely and efficiently.
Audit trails that log every approval, edit, and signature.
Collaboration tools like comments, annotations, and file sharing.
Integration with CRMs and financial systems to reduce silos.
Contract management platform features that enable users to search, approve, and sign contracts in just a few clicks.
Integration with sales teams and sales team workflows for faster deal closure, improved data insights, and enhanced CRM, supporting efficient negotiations and streamlined processes.

Moxo’s workflow orchestration platform was built for these multi-party workflows. Unlike headless or internal-only systems, it provides a client-facing interface, audit-ready tracking, and intelligent nudges to keep contracts on schedule. Moxo helps streamline contract creation, supports ongoing business relationships, and delivers key benefits such as strategic advantage through efficient contract lifecycle management.

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Best practices for an efficient contracts process with contract management software

Standardize templates. Start contracts from approved language to reduce drafting time and negotiation complexity.

Define approval chains. Map who needs to approve and in what order, then automate routing accordingly.

Automate renewals. Set workflows to trigger reminders well before expiration dates, avoiding compliance lapses.

Engage clients directly. Provide external stakeholders with a portal for reviews and signatures, rather than relying on email attachments.

Carefully review the original contract. Before making a contract amendment or drafting a new contract, carefully review the original contract to ensure all terms are accurate and any necessary changes are addressed.

Measure and refine. Track cycle times, identify bottlenecks, and continuously improve.

These practices align with building an efficient contract workflow that saves time, reduces risk, and helps achieve a mutually beneficial agreement.

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Frequently asked questions

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What is the contracts process

It is the structured set of activities that moves a contract from drafting through negotiation, approval, execution, and renewal.

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Why is the contracts process so time-consuming

Because many businesses rely on manual drafting, email for negotiation, and unstructured approvals, which create inefficiencies and delays.

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How can companies improve the contracts process

By standardizing templates, defining approval chains, automating reminders, and adopting orchestration platforms that support client-facing collaboration.

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What are the risks of poor contract processes

Revenue delays, compliance failures, client dissatisfaction, and wasted resources.

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Can small businesses benefit from improving their contracts process

Yes. Even organizations with modest contract volume save time, reduce risk, and project professionalism with structured workflows.

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Don’t waste time in the contracts process

An inefficient contracts process drains resources, delays revenue, and erodes client trust. Orchestrated workflows provide the structure needed to move contracts from draft to renewal without bottlenecks. Moxo enables businesses to manage contracts end-to-end with automation, auditability, and client-facing participation. Book a 15 minute demo and discover how Moxo can help you stop losing time in the contracts process.