35+ Contract Management Statistics You Should Know

As a business owner, you know that contracts are a vital part of your day-to-day operations. Contracts protect your company and ensure that you are meeting your obligations to clients, customers, and other businesses.

The Contact Management process is the act of handling contracts from creation to execution.

Executing a contract means that both parties have agreed to the terms and are legally bound to them.

If one party does not uphold its end of the bargain, the other party can take legal action.

Contract management is a complex process, but it’s important to understand the basics.

Here are some contract management statistics you should know:

But do you know how effective your contract management process is? Are you getting the most out of your contracts?

In this blog post, we will discuss some important contract management statistics that every business owner should know. So let’s dive right in!

Key Contract Management Statistics:

  1. A business can save up to 2% of its annual cost by utilizing contract management (CMSD)
  2. Automating the process of contract management can accelerate negotiation cycles by 50% and reduce inaccurate payments by 75% to 90% (CMSD)
  3. On average, the whole contract process consumes 18% of the selling cycle (Cottrill Research)
  4. By 2024, manual efforts for reviewing and drafting contracts will be reduced by 50% (Gartner)
  5. The contract management software market is expected to be worth $12 billion by 2025 (Forrester)
  6. A business with 1000 employees usually spends around $2.5 to $3.5 million on searching for lost documents or recreating them (IACCM)

General Contract Management Statistics

1. The average cost of a simple contract is $6.900 but more complex ones can reach about $49.00

(World Commerce and Contracting)

Takeaway:

The cost of a contract depends on its complexity. More complex contracts can be more expensive, but they can also provide more protection for your business. It’s important to understand the costs and benefits of each type of contract before you sign it. This statistic indicates that the cost of drafting a simple contract can be as low as $6.9 or it can also increase and be as high as $49 depending on the complexity of the contract and the nature of the business. This number can further increase if long-term contracts are to be drafted which require more complications.

2. A business can save up to 2% of its annual cost by utilizing contract management

(CMSD)

Takeaway:

This statistic indicates that utilizing contract management can help businesses save money. When you have a system in place to manage your contracts, you can avoid costly mistakes and ensure that all parties are meeting their obligations. This can help you save money on legal fees, penalties, and other costs associated with contract disputes. While the cost of a contract varies depending on its complexity, a business can generally save up to two percent of its annual costs by utilizing contract management. This means that utilizing contract management is a great way to reduce expenses and improve your bottom line. If you don’t have a system in place to manage your contracts, now is the time to invest in one.

3. Automating the process of contract management can accelerate negotiation cycles by 50% and reduce inaccurate payments by 75% to 90%

(CMSD)

Takeaway:

This statistic indicates that automating your contract management process can help you save time and money. When you automate the process of creating, executing, and managing contracts, you can avoid costly mistakes and ensure that all parties are meeting their obligations. This can help you save time on negotiation cycles, reduce inaccurate payments, and improve your bottom line. The negotiation cycles can accelerate up to 50% and the inaccurate payments can be reduced by 75% to 90% through effective contract management.

4. 70% to 80% of businesses are governed by contracts

(Cottrill Research)

Takeaway:

This statistic indicates that most businesses are governed by contracts. Contracts are a crucial part of any business relationship, and they can help protect your company from legal disputes. If you don’t have a system in place to manage your contracts, now is the time to invest in one.

As you can see, contract management is a complex process with many different moving parts. But it’s important to understand the basics. This reflects the importance of contract governance by indicating that 70% to 80% of businesses are governed by contracts.

5. 37% of companies spent more than $750k on legal technology in 2018

(COLC)

Takeaway:

This statistic indicates that companies are investing in technology to help them manage their contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. This can help you save time and money on negotiation cycles, reduce inaccurate payments, and improve your bottom line. This statistic indicates that 37% of companies like to invest more than $750K on legal technology as not only does it automate the contract management process but also takes care of any technicalities.

6. On average, $1 million is the amount spent on legal technology for mid-size companies with in-house engineering

(ACC)

Takeaway:

This statistic indicates that mid-size companies with in-house engineering spend on average $1 million on legal technology. This shows that these companies understand the importance of automating the contract management process and are willing to invest in the necessary tools. If you’re not using contract management software, now is the time to invest in it.

7. 80.8% of in-house lawyers had to participate in contract management by reviewing and drafting documents

(ACC)

Takeaway:

This statistic indicates that in-house lawyers are often involved in contract management. This includes reviewing and drafting documents. If you’re an in-house lawyer, it’s important to understand the basics of contract management. This will help you save time and money on negotiation cycles, reduce inaccurate payments, and improve your bottom line. As 80.8% of in-house lawyers are involved in the contract management process so it is necessary for lawyers to go through all the details required in this process.

8. 1.2% of the administrative personnel participate in the process of contract management

(CLOC)

Takeaway:

This statistic indicates that administrative personnel is often involved in contract management. This includes tasks such as reviewing and drafting documents. If you’re an administrative assistant, it’s important to understand the basics of contract management. This will help you save time and money on negotiation cycles, reduce inaccurate payments, and improve your bottom line. 1.2% of the administrative personnel is already involved in contract management so it is vital to train the specific administrative personnel in this regard.

9. On average, the whole contract process consumes 18% of the selling cycle

(Cottrill Research)

Takeaway:

This statistic indicates that the contract process can consume a significant amount of time. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. This can help you save time and money on negotiation cycles, reduce inaccurate payments, and improve your bottom line. 18% is a significant amount of time and if not managed properly, can lead to major problems. This makes it all the more important to have a contract management system in place. Contract management software can help you automate the process of creating, executing, and managing contracts. This can help you save time and money on negotiation cycles and contract drafting.

10. Automating contract management has saved lawyers 82% of their time

(Reuters)

Takeaway:

This statistic indicates that automating contract management can save lawyers a significant amount of time. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Lawyers are already busy people and 82% of their time can be saved if automated systems are introduced for the process of contract management.

11. It takes on average 3.4 weeks to get a contract approved

(Forrester)

Takeaway:

This statistic indicates that it can take a significant amount of time to get a contract approved. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. On average, around 3.4 weeks are consumed in the process of contract approvel. This time period does not include the contract drafting time.

Productive Contract Management Statistics

12. By 2024, manual efforts for reviewing and drafting contracts will be reduced by 50%

(Gartner)

Takeaway:

This statistic indicates that manual efforts for reviewing and drafting contracts will be reduced by 50% by 2024. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. This can help you save time and money on negotiation cycles, reduce inaccurate payments. This statistic also indicates that automation and AI is the future of every business.

13. The best companies renew 56% of their contracts annually

(Aberdeen Research)

Takeaway:

This statistic indicates that the best companies renew 56% of their contracts annually. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. This statisitic also indicates that the best organizations in the world renew 56% of their contracts annually which makes them and their partners and employees stay updated with the latest company goals and requirements.

14. Automating software can reduce the time of a contract approval by 82%

(Aberdeen Research)

Takeaway:

This statistic indicates that automating contract management can reduce the time of a contract approval by 82%. This is why it’s important to have a system in place to manage your contracts. The entire fate of the business lies on the foundation of the contract approval. Ususally, the contract approval time can take up to several weeks which can cause a huge setback to the said business. But with the help of AI and automating software for the contract management, the time for the contract approval can reduce by 82%.

15. The Fortune 2000 companies have 20,000 to 40,000 contracts under management at any given time

(IACCM)

Takeaway:

This statistic indicates that the Fortune 2000 companies have 20,000 to 40,000 contracts under management at any given time. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. These companies usually have plenty of business partners and employees to keep track of. Therefore, it is important for these companies to have a system where they can manage all their contracts in an efficient and secure manner.

16. The global contract lifecycle management market is expected to be worth around $845 million in 2022

(Globe News Wire)

Takeaway:

This statistic indicates that the global contract lifecycle management market is expected to be worth around $745 million in 2022. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. This industry is growing at a rapid pace and is expected to be worth billions of dollars in the next few years.

17. Only 22% of companies are very confident in their ability to track and manage contracts

(IACCM)

Takeaway:

This statistic indicates that only 22% of companies are very confident in their ability to track and manage contracts. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies lose tons of money when the contracts are lost. This is the reason why a very small number, 22%, of the companies actually take great care in the process of storing and securing contracts.

18. The average number of days it takes for a company to renew a contract is 97 days

(IACCM)

Takeaway:

This statistic indicates that the average number of days it takes for a company to renew a contract is 97 days. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most companies take way too long to renew their contracts which can cause a huge setback to the business. But with the help of contract management software, the entire process can be automated and the company can save a lot of time.

19. 40% of organizations do not have a centralized repository for storing contracts

(CLOC)

Takeaway:

This statistic indicates that 40% of organizations do not have a centralized repository for storing contracts. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have a centralized place to store their contracts which can cause a lot of problems. But with the help of contract management software, the contracts can be stored in a central repository and can be accessed by anyone in the organization.

20. The contract management software market is expected to be worth $12 billion by 2025

(Forrester)

Takeaway:

This statistic indicates that the contract management software market is expected to be worth $12 billion by 2025. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. The market for this software is growing at a rapid pace and is expected to be worth billions of dollars in the next few years.

Failure in Contract Management Statistics

21. It takes a company on average 20 to 30 days to create, negotiate, and finalize a contract

(Aberdeen Research)

Takeaway:

This statistic indicates that it takes a company on average 20 to 30 days to create, negotiate, and finalize a contract. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies take way too long in this process and this time period can even be greater than 30 days under some circumstances.

22. A business with 1000 employees usually spends around $2.5 to $3.5 million on searching for lost documents or recreating them

(IACCM)

Takeaway:

This statistic indicates that a business with 1000 employees usually spends around $25 to $35 million on searching for lost documents or recreating them. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies spend a lot of money on searching for lost documents or recreating them. But with the help of contract management software, the entire process can be automated and the company can save a lot of money.

23. Around 40% of a contract’s value can be lost without close contract governance

(KPMG)

Takeaway:

This statistic indicates that around 40% of a contract’s value can be lost without close contract governance. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract governance in place which can lead to the loss of a lot of money. But with the help of contract management software, the entire process can be automated and the company can save a lot of money.

24. 9% in annual revenue is the cost of poor contract management practices

(World Commerce and Contracting)

Takeaway:

This statistic indicates that around nine percent in annual revenue is the cost of poor contract management practices. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices in place which can cause them an amount of 9% of their total revenue. For large companies, this percentage can huge monetary setbacks.

25. Around a quarter of million dollars is lost by large companies every day if the contract management process drags on

(Cottrill Research)

Takeaway:

This statistic indicates that around a quarter of a million dollars is lost by large companies every day if the contract management process drags on. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices in place which can cause them to lose a lot of money. But with the help of contract management software, the entire process can be automated and the company can save a lot of money.

26. 71% of businesses can’t locate 10% of their contracts

(Entrepreneur)

Takeaway:

This statistic indicates that 71% of businesses can’t locate ten percent of their contracts. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices in place which can cause them a big havoc by wasting both time and money. This number can be significantly reduced if efficient contract management practices are implemented.

27. On the other hand, 78% of good businesses have their contracts in a searchable place

(Aberdeen Group)

Takeaway:

This statistic indicates that 78% of good businesses have their contracts in a searchable place. This is why it’s important to have a system in place to manage your contracts. Good organizations like to invest in a proper storage system for their contracts which is also highly secured. This can help them in keeping a tracking a of their operational and active contracts and to search for contracts whenever the need arises.

28. Google was fined 50 million euros for one of its initial contract violations which was a lack of transparency and inadequate information

(BBC)

Takeaway:

This statistic indicates that even big companies like Google are not spared when it comes to contract violations. This just goes on to show how important it is to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices and Google was also one of them when they were fined after observing that they violated some of the basic principles stated in their contract.

29. Amazon was fined 746 million euros for breaching its contract regulations

(Wired)

Takeaway:

This statistic indicates that Amazon was fined a whopping amount of money for breaching its contract regulations. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices in place which can cause them a huge setback, as it also happened with Amazon.

30. Business units in a company fail to adhere to 70% of their executed contracts

(KPMG)

Takeaway:

This statistic indicates that business units in a company fail to adhere to seventy percent of their executed contracts. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices in place which can cause them a lot of financial loss.

31. Companies lose 9.2% of their revenue through ineffective contract management

(Docusign)

Takeaway:

This statistic indicates that companies lose a significant amount of their revenue through ineffective contract management. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. These companies lose around 9.2% of thier total generated revenue.

32. Ineffective contract management causes $270 billion in economic value to be destroyed every year

(CLOC)

Takeaway:

This statistic indicates that ineffective contract management causes a destruction of $270 billion in economic value every year. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices in place which can cause them a lot of financial loss.

33. Every single year, $140 billion is wasted because of the lack of collaboration between commercial and legal teams

(Berwick Partners)

Takeaway:

This statistic indicates that a huge amount of money is wasted every year because of the lack of collaboration between commercial and legal teams. This lack of collaboration can cause a huge setback to the future of the company by implicting them with a huge financial loss.

34. A staggering 95% of organizations don’t have full visibility into their contractual obligations

(IACCM)

Takeaway:

This statistic indicates that a staggering amount of organizations, 95% to be exact, don’t have full visibility into their contractual obligations. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Having full visibility into your contractual obligations can help you avoid any legal implications and financial penalties.

35. On average, it takes a company 62 days to resolve a contract dispute

(DLA Piper)

Takeaway:

This statistic indicates that on average, it takes a company 62 days to resolve a contract dispute. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices in place which can cause them a lot of financial loss.

36. A company will spend $12,000 on legal fees to resolve a contract dispute that’s worth $100,000

(DLA Piper)

Takeaway:

This statistic indicates that a company will spend $12,000 on legal fees to resolve a contract dispute that’s worth $100,000. This is why it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Most of the companies do not have proper contract management practices in place which makes them lose tons of money in dispute cases.

Wrapping Up

These contract management statistics show the importance of having a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts. Having a system in place can help you avoid any legal implications and financial penalties.

These statistics also show that most of the companies do not have proper contract management practices in place which can cause them a lot of financial loss. If you’re looking to avoid any legal implications and financial penalties, it’s important to have a system in place to manage your contracts. Contract management software can help you automate the process of creating, executing, and managing contracts.

What contract management practices do you have in place? Let us know in the comments below!

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