October 22, 2021 0 Comments Technology

What Are the Differences Between a Document and Contract Management System?

While contract and document management systems are very similar, they have entirely different resolves. Both management systems have distinctive functions that impact how documents and contracts processes are managed. 

If you need more information on the functionalities of a contract management system, find more information at ContractSafe.comwhere you will learn more on how to incorporate the system into your business functions.

What is the difference between a contract and a document management system? 

To understand the differences, let us examine each system individually to determine how they function. 

Document management system 

A document management system is a centralized repository that promotes secure collaboration on documents such as editing, tracking, auditing version tracking, and document ownership. The main aim of a document management system is to create a platform that enables teams to effectively retrieve documents and work on projects while minimizing the need to depend on email and other traditional communication options. The software encourages users to collaborate using document management software. 

Numerous document management systems enable users to track critical details of every document, including 

  • Creation date, 
  • Author of the paper, 
  • Editor, 
  • Document objective or what the document is all about,
  • Number of editors who have worked on the record,
  • Document size, etc.

A document management system organizes details and categorizes the information, allowing users to find information stored within the repository easily. With this system, employees can quickly locate information without manually filtering through numerous papers to see what they are searching for. 

Additionally, a document management system gives authorized users complete control over files, allows for settings that permit to enable or disable information users can access, view, edit, and save previous or latest document versions. 

The system has an added advantage as it minimizes dependence on paper and cabinet filing. Teams can send and collaborate on documents without necessarily depending on email. A document management system enhances collaboration with business partners and customers outside your company. 

While a document management system focuses mainly on documentation, it does not include automating approvals or obligation tracking. However, the system enables contract drafting templates and tracks less contract-specific information. 

Contract management system 

A contract management system can manage contract lifecycles, allowing users to draft, edit, track, review and save contracts instantly. The system has a centralized repository where all contracts, templates, drafts, and documents are stored, simplifying the sorting, searching, and filtering processes. 

Furthermore, a contract management system’s primary focus is to help create, negotiate, amending, e-signing, and analyzing documents while automating workflows at every stage, greatly enhancing efficiency. Legal teams can create and store templates in the library for reference and contract drafting, preventing groups from creating contracts from scratch in every situation. 

With the electronic signature solution, creating and signing contracts happens without leaving the platform, a process that saves time. With an e-signature functionality, each contractual party can log into the portal and instantly append their signature, minimizing delays and turnaround time. 

After the signing process, an advanced contract management system provides data analytics and contract lifecycle tracking. The system has software that automatically compiles statistics viewed on a dashboard, allowing you to make real-time analyses and proactive actions depending on outcomes on each step of the contract process. The user-friendly dashboard lets you see what step is next in the contract lifecycle since the system can automatically track each process. 

Differences between document and contract management systems 


A document management system can only manage documentation on one static plane. That is, you can only work within a specific fileto search or refer to documents saved in that folder. In contrast, a contract management system is dynamic. It has a multi-functional dashboard that enables you to edit and has settings that allow for notification alerts, assigning permissions to specific individuals while enabling electronic signing of documents. 

While both document and contract management systems have a central contract repository, a contract management system can automate the system to collaborate with relevant parties with permission to access specific documents. 


A document management system may only assist in storing information. Still, you can automate a contract management solution to perform additional tasks like setting reminders for obligations and critical dates and can track the entire contracting process. 


pexels rfstudio 3810796

A contract management solution has additional features that help in data analysis and specialized research on legal terms and phrases.  

Which system should you use?  

Deciding on which system to use should depend on your organization’s unique needs and objectives. For instance, if your legal department consistently works on a high volume of laborious contracts, you most likely need to adopt a contract management system to optimize your productivity. However, you may consider integrating a document management system to help manage and store documents in an organized fashion, without overreliance on papers and filing cabinets. 


Finally, choose the management system to integrate based on your organization’s goals and primary requirements. Ensure that you expansively understand each method, its benefits, and shortfalls to help you make an informed choice on the best option for your business.