- February 23, 2024
- 15 min read
- Bethany Mullinix
Introduction
Reporting features are the unsung heroes of Contract Lifecycle Management (CLM) software. While creating, storing, and tracking contracts are crucial CLM features, comprehensive reporting capabilities are just as important, and you should never underestimate them.
Contract management reporting is essential for tracking and analyzing contracts and their performance. It helps maintain transparency, manage risks and costs, optimize vendor relationships, ensure legal compliance, and make informed decisions. Ultimately, it can help make or break an organization’s reputation.
For instance, a lack of robust reporting can hinder a holistic view of your contract portfolio, potentially resulting in missed opportunities, compliance issues, and financial losses.
It can also impede informed decision-making, leading to missed chances for optimization and efficiency improvements. Plus, it can also slow down contract negotiations and renewals if contract managers must manually sift through contact data for critical information.
With all this at stake, it’s imperative to carefully consider reporting features when choosing CLM software. We’ve put together some information to help start your research.
What Does Contract Management Reporting Mean?
Contract Lifecycle Management encompasses the entire journey of a contract, from initiation to negotiation, execution, and renewal or termination. Throughout that journey, it’s best practice to conduct an occasional “pulse check” of how the contract is performing.
This is done through contract data analysis and reporting – from basic metadata fields to advanced risk assessments. Typically, contract reporting begins at the post-signature phase of the CLM process and continues through execution and renewal or termination.
Once your contract is active, you can generate reports at various intervals throughout its life and cover a wide range of metrics such as compliance, financial performance, risk assessment, and key performance indicators (KPIs). These reports hold vast amounts of data and insights that profoundly impact your organization’s bottom line.
Well-informed contract management reporting typically includes:
- An Executive Summary – A high-level overview of the contract management process, highlighting key statistics and insights
- Company-wide Contract Status – Total active and inactive contracts in the system and a breakdown of which contracts are expiring soon, which ones have upcoming milestones, and which may be in compliance breach
- Creation and Authoring Data – The number of new contracts, average contract-drafting time, and authoring delay (contracts delayed beyond the initial deadline)
- Approval and Negotiation Status – Contracts awaiting approval, average approval time, and the number of contracts with unresolved negotiations
- Execution Rates – The number of executed contracts, electronic signatures, and contracts pending signatures
- Renewal Deadlines & Rates – Which contracts are due for renewal, which contracts have been renewed, and which have not
- Termination and Closure Numbers – Which contracts have been terminated, along with the reason(s) for termination
- Performance Metrics – Information such as contract cycle time, compliance rate, renewal rate, and contract termination rate
- Recommendations – How to improve the contract management process based on the report findings.
The Importance of Reporting in Contract Lifecycle Management
Regular contract reporting is essential because it creates visibility and transparency, providing a bird’s-eye view of your contract portfolio. At a glance, it reveals overall contract statuses, upcoming renewals, and potential risks or opportunities – critical data for informed decision-making.
Contract reporting also helps identify potential risks such as compliance issues, missed deadlines, or unfavorable terms. For example, you can use reporting to track vendor performance and how well the vendor meets obligations. When you understand vendor performance, you can identify areas for cost savings, such as negotiating more favorable terms with suppliers or better allocating resources.
Additionally, contract reporting can be crucial for compliance and audit readiness. Effective reporting establishes a complete record of all contract-related activities, simplifying the audit process.
Features of Optimized CLM Reporting
As you research CLM platforms, pay particular attention to their reporting features. They should be clear, comprehensive, easy to use, and include:
- Customization – Your CLM reporting should be customizable to meet your specific business needs, with reports tailored to your organization’s unique contract data and objectives.
- Real-Time Updates – Real-time reporting ensures you have access to the most current contract data, helping you make agile decisions and quickly respond to changing market conditions.
- Data Visualization – Effective reporting should include data visualization tools such as charts and graphs, making it easier for stakeholders to grasp insights.
- Alerts and Notifications – Automated alerts and notifications for critical contract events – such as upcoming renewals, milestone deadlines, or compliance violations – will help keep your team informed and up to date.
- Integration Capabilities – Seamless integration with other business systems, such as Enterprise Resource Planning (ERP) or Customer Relationship Management (CRM), will provide a holistic view of your contracts’ impact on your operations.
What’s the best way to implement contract reporting into your existing business workstream? Start by evaluating your current CLM process. Identify pain points, bottlenecks, and areas where reporting could make a significant difference.
Next, choose the right CLM software. Invest in a solution that aligns with your organization’s needs and goals and offers customizable reporting options along with integration capabilities.
Standardize your contract data. This means having a consistent and organized way of recording information for accurate reporting. Train your team on the CLM system and reporting features; make sure they understand how to create and interpret reports.
Define what contract information matters most to your organization and set KPIs based on that data.
Finally, regularly review your reporting processes and reports. Adjust as needed to stay aligned with your business objectives and evolving needs.
Where to Learn About the Top CLM Solutions’ Reporting Capabilities
Now that you’re up to date on reporting basics, you can put what you’ve learned into your CLM platform research.
What’s your next step?
Consider reading what industry professionals have to say about various platforms. Weigh their strengths, potential shortcomings, and unique features against your organization’s needs. Then, narrow down your choices to which platforms you should demo.
Here are two leading industry analyst reports to get you started:
- Gartner CLM Magic Quadrant 2024 – This report delves deep into the CLM vendor landscape, providing insightful analysis, visual snapshots, and actionable advice on the market’s trajectory, growth, and players.
- Gartner Critical Capabilities This report is an indispensable aid to the Gartner Magic Quadrant, providing a more profound understanding of the CLM market.
Want to know what other capabilities are critical for CLM platforms? Read more about our top two must-haves:
Additional Resources
6 Types of Risks In Contract Management And How To Mitigate
Essentials of Contract Obligation Compliance Management
AI Contract Analysis: A Comprehensive Guide for Legal Teams
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