5 Risks of Manual Contract Approval Every Legal and Procurement Team Should Know

The 5 Risks of Manual Contract Approval

The problems with manual contract approval extend beyond inconvenience. Each weakness in the process can translate into a concrete business risk for legal, procurement, finance, sales, and other stakeholders.

1. Version Control and Document Integrity Risk

When multiple contract drafts move between stakeholders through email, maintaining reliable version control becomes difficult.

One approver may review an older attachment while another comments on a newer version. Revised clauses can be distributed across separate email chains, and teams may need to manually determine which document contains the latest agreed language.

The business impact is significant: the wrong version can move forward for approval, previously negotiated changes can be lost, or stakeholders can make decisions based on outdated contract language.

A structured process should maintain a clear document history and ensure that reviewers are working from the current version rather than relying on manually distributed files.

2. Delayed Deal Cycles and Turnaround Risk

Manual approvals frequently depend on someone identifying the next approver, forwarding the contract, following up, and waiting for a response. When ownership is unclear or an approver is unavailable, the agreement can simply stop moving.

These approval bottlenecks can delay deal closure and create downstream commercial problems. If updated pricing or billing terms remain stuck in approval while the business continues delivering goods or services, the organization may operate without the latest approved commercial terms in place.

Poor contracting practices erode an average value equivalent to almost 9% of annual revenue—and 15% or more in more complex industries.

The operational effect can also be substantial. One customer described the visibility problem this way:

“We had no visibility into workflow, so our contract turnaround time was around 90 days. We wanted a way to be able to show where exactly the bottlenecks were.”

Without real-time workflow visibility, teams may know that contracting is slow without knowing exactly where or why delays are occurring.

3. Compliance and Legal Risk

Manual approval processes can scatter evidence of contract decisions across email chains, local hard drives, shared folders, and individual records.

That fragmentation creates compliance risk because teams may struggle to demonstrate who reviewed an agreement, which exceptions were approved, what version received authorization, and whether required controls were followed.

The problem extends beyond audit preparation. Contract-related data is scattered across 24 different systems on average, making it difficult to track commitments or approval decisions on a timely basis.

A fragmented approval record can therefore make regulatory reviews and internal audits more difficult while increasing exposure to legal liabilities where required approval procedures cannot be demonstrated.

A structured contract risk management approach needs approval decisions and the underlying contract record to remain connected.

4. Miscommunication and Accountability Risk

Manual workflows make it difficult to establish exactly who owns the next decision.

A contract may be sent to several people without a clear primary approver. One stakeholder may assume someone else has approved it, while another may not realize action is required. In other cases, contracts can remain stalled because nobody has clear accountability for progressing them.

This creates both miscommunication and stakeholder visibility problems. Without a structured workflow, teams lack a consistent view of who has reviewed the agreement, who is pending, and what happens next.

The communication challenge is compounded by contract complexity: almost 90% of business users say they find contracts difficult or impossible to understand.

Clear ownership, defined approval responsibilities, and visible workflow status reduce the likelihood that contracts are skipped, misunderstood, or left waiting without an accountable owner.

5. Cost and Scalability Risk

Manual approval consumes skilled time.

Legal and procurement professionals may spend significant portions of their working day routing documents, updating trackers, following up with approvers, checking versions, entering data, and answering status questions.

These activities may be manageable at lower contract volumes but become increasingly difficult to scale. As the business grows, the organization either adds administrative effort or accepts longer turnaround times and weaker process visibility.

The result is a scalability problem: highly skilled professionals spend time coordinating approval mechanics instead of reviewing substantive contractual issues, negotiating commercial positions, managing risk, or supporting strategic business priorities.

How to Reduce the Risk of Manual Contract Approval

Organizations can reduce manual contract approval risks by introducing clearer ownership, centralization, automation, and traceability into the process.

• Define a clear approval matrix. Document who must approve different contract types, values, risk levels, and deviations. This gives stakeholders clear decision rights and reduces uncertainty about where a contract should go next.
• Centralize contract storage. Move away from treating email attachments and shared drives as the source of truth. A centralized contract repository helps teams maintain contracts and related records in a consistent location.
• Automate routing and reminders. Replace manual chasing with rule-based approval routing, notifications, reminders, and escalation. Contracts can move automatically to the appropriate stakeholder based on predefined conditions.
• Maintain a system-generated audit trail. Capture views, edits, reviews, approvals, and signatures automatically. A complete audit trail provides a defensible record of the approval process without requiring teams to reconstruct decisions from email.
• Integrate e-signature. Connect approval with execution so contracts can move from final authorization to signature without leaving the controlled workflow.

Together, these steps turn approval from a series of individual follow-ups into a defined and auditable business process.