How to Automate the Contract Approval Process


Key takeaways

  • The approval of all the reviewed and approved contracts is performed through the contract approval process.
  • A manual contract approval process is tedious, disorganized, and bound by bottlenecks. 
  • Automation of the contract approval process helps the stakeholders track the status of the contract at all times.
  • Cflow is a no-code Cloud BPM workflow automation solution that automates key business workflows in minutes.

What is the Contract Approval Process?

For any contract to come to life, it has to be approved. This is done using the contract approval process. The process is part of the contract management lifecycle that is initiated after contract creation and negotiation. The process involves reviewing all the contracts and ensuring approvals by all the departments and stakeholders.

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Streamline the Contract Approval Process with Automation

Companies that engage with multiple vendors often deal with complex contract approval processes. Manual approval of contracts can consume a huge chunk of the productive time of the procurement team.

Components of Contract Approval

Contracts could be of many types: procurement or vendor contracts, promissory notes, sales contracts, employment contracts, lease contracts, licensing agreements, non-disclosure agreements, and indemnity agreements. When we talk about vendor contracts, the approval process is as simple or as complex as the policies and systems that are followed in the company.

Irrespective of the scale of the operations, the contract approval process entails the following steps.

1) Internal Contract Origination:

The paperwork for the contract is created by the salesperson and includes all the terms negotiated by both parties. The contract is as per the policies specified by the organization. The final draft of the contract is then submitted to the reviewer.

2) Internal Contract Review:

The contract is either submitted to the manager or department head, or COO for review and approval. The contract is reviewed and compliance with company policies is checked and approved or rejected based on the reviewer’s scrutiny. The contract may also be sent back for lack of details or errors.

3) Signatory Review:

Once the contract has been approved internally, it is sent to a signatory for review/approval. The contract is thoroughly checked for confidentiality terms, dispute resolution, timelines, etc., and approved or rejected based on the outcome of the review.

4) Contract Amendment:

Errors or issues raised by the signatory are addressed by modifying the contract. Once changes are made, another round of reviews and approvals ensue.

5) Contract Execution:

This is the last stage where all the stakeholders sign the contract. Although it sounds simple, this stage may take a long time to complete since there are multiple signatures required.

The steps of the contract approval process laid out in the above section seem very straightforward, but the reality is that it may take anything between days to months for closure.

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Problems with Manual Contract Approval

The manager is out of the office or the COO is busy in a meeting or the approval of the authorized signatory is pending – familiar situations for the procurement teams. Contract approvals are often pending endlessly due to trivial reasons or the absence of the signatory or simply because the manager refuses to approve. The end result is a frustration for both parties and a colossal waste of productive work hours. When it comes to large-scale organizations that deal with hundreds of vendor contracts, such delays affect the business’s bottom line.

The manual contract approval process apart from being tedious has other drawbacks:

Disorganized: Keeping track of contracts in the manual process is a headache. The status of the contract is unclear to the team because it is buried under lengthy email exchanges or spreadsheets or lost in phone conversations.

No time-bound reviews: getting the contract reviewed by the right person at the right time is an elusive event in the manual approval process. Even contracts that are top priority are not approved at the right time due to inefficient manual approval processes.

Timelines missed: Manual approval processes are driven by emails and spreadsheets. Very often approval timelines are lost in lengthy email exchanges.

Bottlenecks: Since there is no visibility into the status of the contract, it becomes difficult to pinpoint where bottlenecks occur.

The contract approval process may seem very complex and time-consuming, but it need not be so. The right automation tools can accelerate and simplify the approval process.

Faster and Fully Transparent Contract Approval

Intelligent automation of the contract approval workflow can make the process more efficient and transparent. Automating the contract approval process streamlines the steps leading to approval. Approval workflows can be built based on the contract type, department type, stakeholders, and other parameters. Workflow automation creates an easily configurable approval process that is rule-based.

Automation of the contract approval process helps the stakeholders track the status of the contract at all times. Custom calendars and reminders can be set for contract requests by tagging expiry and renewal dates. Key team members are notified of approval deadlines, modifications to the contract, and the legal review status for every contract processed through the automated system.

Automation allows complete transparency throughout the approval process. The leadership can also get status reports that highlight how the staff handles contracts and areas for process improvement.

Choosing the right workflow automation software makes all the difference to the success of automating the contract approval. Cflow from Cavintek is a no-code Cloud BPM workflow automation solution that automates key business workflows in minutes.


Kick out delays and inaccuracies from contract approval. Give your business the advantage of quick and transparent contract approval. Are you ready to automate the contract approval process?

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