CLM Priorities for Finance Teams: AI, Accuracy, and Control
- Last Updated: Jan 06, 2025
- 15 min read
- Sirion
What is this contract costing us?” “Are we getting enough revenue in to afford building out this team?” “Where has this $100,000 gone?!”
These are the kinds of questions Finance asks daily to protect the bottom line—whether they say them out loud or not.
But when offered new tech tools that aim to improve operations and day-to-day tasks, there’s another phrase that seems to be standard: “Another solution to pay for?”
While it may be easy to write off some solutions as more spend, that’s not the case with CLM tools. With the efficiency and accuracy contract lifecycle management delivers, these platforms are investments that pay for themselves in spades—especially for finance teams.
Keep reading to see how CLM solutions make a difference for finance teams and how they can boost financial management across your enterprise.
Why Contracts Are a Finance Concern
$7,000: the cost of creating an average contract
$50,000: the cost of creating a complex contract.
$6,900: the cost of reviewing a low-complexity contract
61%: the percentage of CFOs planning on using GenAI to improve performance over the next year.
What does that tell us? Enterprise finance leaders are recognizing the monetary impact of contracting. And what’s more, they’re looking to improve how things are done and drive cost optimization.
So how exactly does a lack of contract visibility and control impact Finance? Let’s take a closer look at the risks they face without CLM in place.
The Real Cost of Poor Contract Management
Without a contract lifecycle management (CLM) system, finance teams are stuck playing a high-stakes guessing game. Contracts are scattered across departments, unsearchable, and handled manually—creating blind spots in critical financial data. The result is a cascade of risks that quietly erode performance:
- Financial Risk Exposure: Unfavorable payment terms, hidden liabilities, currency fluctuations, and unstable counterparties often go undetected. As time goes on, mistakes multiply under pressure.
- Compliance Headaches: Without audit trails and centralized controls, proving compliance with regulations like SOX, IFRS 16, or ASC 606 becomes a scramble. According to World Commerce & Contracting, poor contract management can cost companies up to 9% of annual revenue—often due to missed obligations and compliance lapses.
- Inaccurate Reporting & Forecasting: Finance teams can’t confidently forecast revenue or accrue expenses when data is buried in PDFs. Manual searches delay decisions and increase the risk of error.
- Revenue Leakage & Uncontrolled Spend: Missed renewals, uncaptured discounts, and payments outside agreed terms quietly drain value. Duplicate payments and maverick spending compound the problem.
- Operational Drag: Hours lost chasing down contracts, validating invoices, and preparing for audits leaves little time for strategic work. Review cycles stretch out, causing bottlenecks and late payments that strain supplier relationships and reduce contract value.
In short, when contract management is broken, everything downstream suffers—from compliance to cash flow. It’s a pain finance teams may not fully recognize until they fix it—and once they do, they never want to go back.
Fortunately, the right CLM doesn’t just reduce risk—it actively enables Finance to work smarter. Here’s what your platform needs to deliver to support financial priorities.
CLM Capabilities That Finance Teams Need
Finance has a few needs that your chosen CLM should deliver in order to make all the problems we mentioned above disappear.
1. Visibility
Your Finance team needs to be able to see every financial contract data point in every contract across your entire portfolio. This includes financial obligations, service levels, rate cards, and pricing.
Only once they have contract visibility into the terms that impact your enterprise’s revenue streams can they accurately forecast and budget for the future.
2. Risk Controls
Finance needs to be able to partner with Legal to ensure that the language used in agreements maximizes contract compliance and minimizes value leakage.
They also need to trust that every contract moving forward includes that language to continuously build their risk management strategy.
3. Automation
Finance spends a large bulk of their time manually validating invoices and tracking enterprise spend. They need ways to improve contract automation and reduce that overhead.
While many teams would think that another finance-specific tool might be the solution here, CLM solutions actually get the job done much more efficiently.
Once those foundational needs are met, CLM begins to unlock much broader value. Here’s how Finance can turn contracts from administrative overhead into strategic leverage.
How Finance Teams Get Value from CLM
Sure, contract lifecycle management platforms offer a big help to Legal and Legal Ops.
However, enterprise finance teams can actually leverage the same capabilities to make their own lives even easier.
1. House Contracts in One Place
Forget the days of having to email separate departments and search through half a dozen systems to find a contract to reference.
CLM platforms let you establish a single repository that houses your entire business contract portfolio. You can find any agreement (or data points) you need right there.
Plus, with AI-powered conversational search, you simply tell the platform what you’re looking for and get results in seconds.
2. Connect Your Financial Strategy and Contracts
Don’t waste time and effort guessing if the financial terms within your contracts match the strategy you set out for the business.
Leverage visual dashboards and solution integrations to make clear connections between cash-impacting terms and your financial plan.
3. Automate Contract Review Tasks
Rely on contract AI to automatically analyze and redline your agreements to identify deviating terms and ensure that you have the proper risk controls in place to reduce risk and protect your business.
4. Monitor Contract Obligations
Get real-time insight into vendor performance to quickly ensure suppliers are meeting service levels. Use that data to validate invoices and maintain strong contract value.
5. Get Automatic Renewal Alerts
Never make an accidental payment again. Set alerts and get automatic reminders of contract renewal dates so you’re only spending as intended.
Traditional CLM already makes a huge difference—but AI-native CLM platforms take everything to the next level, delivering deeper insights and even more automation. Here’s what that looks like.
The AI Advantage: Supercharging Finance Contract Intelligence
While standard CLM offers significant benefits, an AI-Native CLM Platform like Sirion takes financial contract management to the next level. Instead of just automating workflows, it embeds artificial intelligence directly into the analysis and management process, offering deeper, more proactive insights crucial for finance.
What does this mean for your finance team?
- Intelligent Data Extraction: AI can automatically identify and extract hundreds of complex financial clauses, obligations, entitlements, and metadata points from contracts with high accuracy, even from legacy documents or third-party paper. This populates your systems with reliable data for reporting and analysis far faster than manual review.
- Predictive Risk Scoring & Anomaly Detection: AI algorithms can analyze contract language and historical performance data to proactively identify potential risks, flag non-standard or problematic clauses, and detect anomalies in payment terms or financial commitments that might otherwise be missed.
- Automated Compliance Monitoring: AI can continuously monitor contracts against evolving regulatory requirements and internal policies, automatically flagging potential non-compliance issues related to SOX controls, revenue recognition rules, or data privacy regulations.
- Uncovering Hidden Opportunities: By analyzing trends across the entire contract portfolio, AI can highlight opportunities for cost savings through vendor consolidation, identify possibilities for renegotiating unfavorable terms, or pinpoint untapped revenue streams based on existing agreements.
But AI alone isn’t enough. For maximum impact, CLM must work with the tools Finance already relies on. That’s where integration becomes critical.
Why CLM Integration with Financial Systems Matters
A CLM system realizes its full potential for finance when it seamlessly integrates with core financial platforms like Enterprise Resource Planning (ERP), accounting software, and Procure-to-Pay (P2P) systems. This creates a unified data ecosystem, eliminating silos and streamlining critical financial processes.
Consider these powerful integration use cases:
- Streamlined Procure-to-Pay: Automatically validate invoices against contract terms within the CLM before payment is processed in the ERP, preventing overpayments and ensuring compliance with negotiated rates and discounts.
- Automated Order-to-Cash: Link sales contracts in the CLM directly to billing schedules and revenue recognition processes in the accounting system, ensuring accurate and timely invoicing based on agreed milestones and deliverables.
- Synchronized Data for Real-Time Visibility: Ensure consistency between contract commitments tracked in the CLM and financial actuals recorded in the ERP or accounting system. This provides a single source of truth for more accurate financial reporting, budgeting, and forecasting.
So, what should Finance look for in a CLM platform? Here are the capabilities that matter most when choosing the right solution.
Choosing the Right CLM: Must-Have CLM Features for Finance
When evaluating CLM solutions, finance teams should prioritize platforms offering features specifically designed to meet their needs. Look for:
- Centralized, Secure Repository: A single source of truth for all contracts with granular user permissions to control access based on roles and responsibilities.
- Advanced Search & Reporting: Powerful search capabilities (including searching within documents) and customizable reporting dashboards focused on financial metrics, risks, obligations, and key dates.
- AI-Powered Analysis: Capabilities for automated data extraction, risk identification, clause comparison, and anomaly detection specific to financial terms.
- Obligation & Milestone Tracking: Automated tracking and alerting for key financial dates, payment schedules, compliance requirements, and performance milestones.
- Robust Integration Capabilities: Pre-built connectors or flexible APIs to seamlessly link with ERP, accounting, P2P, and other critical business systems.
- Audit Trails & Compliance Features: Immutable logs of all contract activities and specific features supporting compliance frameworks like SOX.
All together, these capabilities form the foundation of a new kind of financial control—driven by contract intelligence and automation.
Putting Finance in Control of Contracts
For too long, contracts have been a source of friction and risk for finance departments. Locked in static documents and managed through inefficient processes, their true financial implications remained obscured. Modern AI-Native CLM solutions change this paradigm.
By providing visibility, automating processes, embedding intelligence, and integrating with core financial systems, CLM transforms contracts into strategic assets. Finance teams gain the control, insight, and efficiency needed to proactively manage risk, ensure compliance, optimize financial performance, and contribute more strategically to the business. It’s time to move beyond spreadsheets and unlock the full financial power hidden within your contracts.
Frequently Asked Questions (FAQs)
How does CLM specifically help with SOX compliance?
CLM systems provide essential controls for SOX compliance by offering a centralized contract repository, enforcing standardized approval workflows, creating immutable audit trails of all contract actions (viewing, editing, approving), tracking key financial obligations, and enabling granular user permissions to ensure segregation of duties. This makes demonstrating compliance significantly easier and less error-prone during audits.
Can CLM help automate revenue recognition based on ASC 606/IFRS 15?
Yes, advanced CLM platforms, particularly those with AI, can automatically extract key data points required for revenue recognition (e.g., performance obligations, transaction prices, contract duration, specific deliverables) from contracts. By integrating this structured data with accounting systems, CLM streamlines the process, improves accuracy, and reduces manual effort associated with ASC 606 and IFRS 15 compliance.
How does CLM integrate with our existing ERP or accounting software?
Leading contract management software’s offer pre-built connectors for popular ERP and accounting systems (like SAP, Oracle) or provide robust APIs (Application Programming Interfaces) for custom integrations. This allows for seamless data flow between systems, enabling processes like automated invoice validation against contract terms or synchronizing vendor/customer data.
What is the typical ROI for implementing CLM for a finance department?
The ROI can be significant and multifaceted. Key areas include reduced revenue leakage (often 1-5% of contract value), cost savings from improved spend management and preventing duplicate payments, decreased audit costs due to better compliance and readily available documentation, and increased operational efficiency freeing up finance team time for strategic tasks. Many organizations see payback within 12-18 months.
Our contracts are complex. Can CLM handle non-standard terms and financial clauses?
Absolutely. Robust CLM systems, especially AI-Native CLM platforms, are designed to handle complexity. AI-powered extraction can identify and interpret non-standard clauses, while configurable workflows and obligation tracking can manage unique financial arrangements, payment schedules, and performance metrics specific to your business needs.
Additional Resources
When to Walk Away from a Contract Negotiation: 6 Signs
