August 21, 2025

How Contract Automation Accelerates Business Growth: Benefits, Workflows, and Real-World Applications

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Tools for contract generation have existed for decades. However, the AI and machine learning boom has introduced us to a more efficient way of generating contracts. This has not only changed the way we view the process but also transformed how modern businesses function. Technology has transformed so much that you may not even remember how tedious the process was. Let me paint a picture for you.

Back in the day, there were templates, and you probably used placeholders to generate documents dynamically. Even with that, you had multiple email threats filled with redlines waiting to be edited, chasing signatures, and so much more. Today, of course, life is much easier. Specialized software or tools, APIs, and even AI-driven tools handle the entire process, optimizing every stage of contracting.

The shift from contract generation to automation has been inevitable. Businesses, regardless of size, be they enterprises, startups, or even legal teams, are adopting these solutions to handle higher contract volumes, ensure compliance, and, more importantly, to stay competitive in the market.

Have you ever wondered how much time you spend chasing contract signatures? Then maybe this blog is just for you!

What is Contract Automation?

Contract automation uses software, artificial intelligence, and digital workflows to author, negotiate, execute, and manage contracts electronically. It handles every phase of the process from drafting to approval, signing, and renewals. One might assume that only legal organizations are using such tools, but the reality is that contracts are issued by any business, for instance, sales contracts. Typically, these contracts would be overseen by the legal team, but with contract automation tools, the software would ensure compliance, save time, and money for the organization.

To dive deeper into document generation, explore our guide to Dynamic Document Generation.

Contract automation, which used to be a niche legal solution, has become the driving factor of growth and operational efficiency in most organizations. By automating traditionally manual processes, organizational processes have cut down on inefficiencies and offer smoother experiences for every stakeholder involved.

Did you know?

A study conducted by Superlegal looked at the average time it took lawyers and AI to finish reviewing contracts. The lawyers took 92 minutes on average to review the contracts, compared to 26 seconds for the AI. Not to mention that AI’s average accuracy rating was 94%, while lawyers achieved an average of 85%.

Benefits of Contract Automation

Companies are using these tools because they provide some obvious benefits. Let’s look at some of the most relevant benefits that they offer stakeholders.

Reduced Manual Errors and Delays: Automated tools can catch discrepancies and errors and rectify them. It only uses approved templates and ensures that any common mistakes typically slipped through in manual reviews wouldn’t happen just by using a contract automation tool. If you think that humans are more efficient, studies prove otherwise–traditionally procured projects contain 68% of the errors in contract documents among the procurement methods.

Boosting Compliance: Automated tools ensure compliance is maintained. Platforms constantly monitor and update regulatory requirements. They maintain audit trails and verify whether the contract aligns with internal policies and legal regulations. 

Efficiency and Scalability: Humans cannot compare to machines, as businesses grow, contract volume also grows. Automation can scale without extra headcount, managing thousands of documents, sending out notifications, and centralizing data management. According to Thomson Reuters, lawyers have reported up to 82% time savings when using document automation to generate contracts and other legal documents. 

Revenue and Faster Turnarounds: The process creating anf managing contracts is tedious. Automation can help you save time and money on negotiation cycles, reduce inaccurate payments, and improve your bottom line. An automated contract management system can speed up negotiations by 50%, reduce payment errors by 75 to 90%, and lower the cost of managing contracts by 10 to 30%, according to a Goldman Sachs report.

Streamlined Communication: A common recurring issue is that contracts are reviewed and multiple people are involved in their creation, making it difficult to track all changes and approvals in real time. According to a MEMBA PwC report, “we have seen organizations where an agreement that goes through 10 revisions is printed and archived more than a hundred times by different people. At the end, no one knows which is the final draft. With e-mail, the phenomenon is even worse”.

Resource Allocation: Legal and commercial departments can shift their focus from repetitive tasks by simply delegating contract generation to a tool or software. This gives them time to negotiate favorable terms instead of chasing approvals and signatures. A gartner report mentions that managing contracts can consume up to half of the legal department’s time and capacity. Think about it, what would you rather have your employees do? Spend their time on monotonous tasks, or bring revenue to your company?

Want to automate not just contracts, but all customer communications? Read up on our CCM blog.

How Contract Automation Solutions Work

Most modern contract automation platform relies on a bundle of technologies.

● There are purpose-built software that generates documents, stores them, and routes them for proper approvals.

● These tools connect with your CRM, HR, or finance systems for data flow.

● Modern tools are equipped with AI and Machine Learning capabilities to analyze clauses, suggest edits, and spot risk automatically. 

● The document automation tools standardize contract templates while personalizing fields for each client or every deal.

● There are collaboration and negotiable capabilities to allow for version control with controlled access and redlining capabilities.

● The integration of e-signature eliminates the need for physical signatures, and reporting and analytics track contract performance, identifying potential issues to optimize the process.

Interested in legal document generation tools? Check out our guide, which reviews the top-rated legal document automation platforms.

Keep Reading to See How Exactly Contract Automation Can Simplify Your Life

1. Create Your Contract: The tools are equipped with common contract templates, loan agreements, and sales contracts. These templates are filled with placeholders that are replaced with key details from your CRM or database. You can set up digital forms and clause libraries for different contract types to maintain consistency in terms of internal policies and regulations. 

2. Negotiate: Those involved are invited to collaborate through real-time editing. The tool tracks any changes with AI-powered redlining. Moreover, it triggers approval workflows, tracks all interactions, and keeps an audit trail.

3. Approvals: You can assign approvers, set specific rules, and the system will route documents to the right stakeholders for review. It intelligently escalates documents based on value or risk with notifications at every step, keeping everyone updated about contract milestones and obligations.

4. Signatures: E-signature capabilities helps capture clients, partners, or employees signs on any device, sometimes even equipped with advanced features like SMS verification, biometric, or the most common–handwritten digital inputs.

5. Amendments: Automated workflows can simplify amendments by generating change requests, which would route documents for review, update it, and re-collect signatures accordingly. This helps with version control, updates, and renewals.

6. Renewals and Storage: With automatic reminders, the system triggers renewal or expiry actions. It also stores contracts under a centralized database for quick searches and maintenance of compliance.

An example can help you understand how easy it truly is to automate your documents rather than manually generating them. Take Perfect Doc Studio (PDS) for example, A sales rep can initiate contract creation using one of the pre-built templates. PDS retrieves the template, fills in the details, and sends it out for testing. Once testing is completed, it is routed to legal for approval. Once signed, status updates, key dates, and renewal reminders are automated without manual approval. PDS’s workflows handle everything, making it easier for you.  

Let’s Look at Some Use Cases and Applications

Sales Contract Automation: For sales teams, contract automation refers to instantly generating agreements using templates. These templates integrate CRM data, automating the whole process through approval workflows and collecting electronic signatures. This helps them close deals quickly and have a higher turnaround.

Salesforce research mentions ‘eighty-two percent of sales employees report increased time for customer relationship building due to automation’. This gives them time to build better relationships, which would in turn boost your revenue.

Loan Contract Automation: Banks and other lending institutions automate loan agreements, risk assessments, approvals, repayment schedules, and more. Through customizable modules and real-time integrations, a purpose-built software can notify clients of penalties and payment updates automatically, saving time and reducing errors.

A McKinsey report states that loan-issuance volumes have grown 4 percent annually since 2015. With all this growth, isn’t it high time to automate your loan contracts so your employees can spend time on what truly matters–your clients.

Contract Lifecycle and Approval Automation: Contract lifecycle management (CLM) software handles the entire contract lifecycle from drafting to negotiation, amendments, approvals, and renewals. This advances beyond contract automation by focusing on drafting and execution.

According to the Blickstein Group’s annual Law Department Operations Survey, 60% of companies are considering contract management software updates in the near term. When so many organizations are considering investing in contract automation, what’s stopping you?

Automated Contract Negotiation and Preparation: With AI, tools are now able to analyse contracts, flag sticking points and potential risks, benchmark clauses, and redline suggestions. Even across countries, stakeholders can collaborate in real-time.  

According to Gartner, by 2027, 50% of organizations will use AI-enabled contract risk analysis and editing tools to support supplier contract negotiations. These tools have consistently proven to be more meticulous than humans, making them a worthwhile investment.

Automated Contract Signing for Enterprises: Digital signature platforms let enterprises sign electronically through various methods (digital writing, SMS, or biometrics). This makes multi-party and sequential signing easy while maintaining legal validity through secure identification.

With e-signature, up to 82% of agreements are completed in less than a day and 50% in less than 15 minutes. See how easy and efficient digital signatures can be. By implementing them, you can drastically increase your productivity.

Start automating your contracts today with Perfect Doc Studio! Try our lifetime freemium version to see PDS in action.

FAQs

Most contract automation platforms offer customized templates that meet organizational needs. These templates will be filled with data from your CRM or database, handling the end-to-end process.

Contract lifecycle automation refers to handling every stage of a contract’s journey. It differs from contract automation by managing everything from creation through negotiation, approval, execution, and renewal, while contract automation focuses only on contract drafting and execution.

Contract terms can be automated using rule-based logic and conditions that you can set up on your platform. Set up term triggers and manage amendments to ensure consistency across agreements.

The transition to automated contracts would require you to train your staff on the new technology, integrate with existing systems, and adjust workflows. These common hurdles do not include securing executive buy-in, ensuring data privacy, and overcoming the resistance you might face from your employees.

Contract automation platforms encompass security measures; you can also do your research on what kind of security they off before investing in a platform. They employ such measures to protect sensitive information, offering automatic audit trails, compliance monitoring, and so much more to reduce the risk of legal and financial issues for your organization.