Process and Extract Contract Data with AI in Microsoft Power Automate

Why Automate Contract Processing in Power Automate?

Managing contracts manually can be slow, inconsistent, and error-prone. Extracting key terms, parties, and dates by hand not only wastes time but can also lead to compliance issues and missed obligations.

With Encodian’s ‘AI – Process Contract‘ action in Microsoft Power Automate, you can automatically extract essential contract details, such as parties, dates, and jurisdiction, and return them as structured JSON data for downstream automation.

In this tutorial, we’ll show you how to build a Power Automate flow that:

• Automatically processes uploaded contract documents using AI
• Extracts meaningful data (e.g., party names, execution dates, duration)
• Updates a SharePoint document library with structured data
• Saves the contracts as PDF alongside its extracted details

This automation helps organisations accelerate document processing, improve accuracy, and make contracts searchable, reportable, and auditable directly within Microsoft 365.

Before You Begin

1. Download sample contracts for test:
   • NDA Encodian Solutions Ltd and BluePeak Analytics.pdf
   • NDA Encodian Solutions Ltd and GreenLeaf Technologies Ltd.pdf
   • NDA Encodian Solutions Ltd and RedSky Solutions Ltd.pdf
   • NDA Encodian Solutions Ltd and Silverware Consulting Ltd.pdf
2. Create a SharePoint document library called ‘Contracts’ with the following text columns:
   • Duration
   • Execution Date
   • Effective Date
   • Party 1 Name
   • Party 1 Address
   • Party 2 Name
   • Party 2 Address

Step-by-Step Tutorial: Build the Power Automate Flow

1. Create a new ‘Automated cloud flow‘.

1.a. Flow name: Provide a name for your flow

1.b. Trigger: Select the SharePoint ‘When a file is created (properties only)‘ trigger action

1.c. Click ‘Create‘.

2. Configure the ‘When a file is created (properties only)‘ trigger action.

2.a. Site Address: Select the name of the site where you have previously created the document library ‘Contracts’.

2.b. Library Name: Select the library ‘Contracts’.

We now need to configure the flow to retrieve the contract document content from the SharePoint ‘Contracts’ library

3. Add the SharePoint ‘Get file content’ action.

3.a. Rename the action to ‘Get file content – Contract’

3.b. Site Address: Select the name of the site where you have previously created the document library ‘Contracts’.

3.c. File Identifier: Select the ‘Identifier’ property provided by the ‘When a file is created (properties only)‘ action.

Now we need to add the Encodian action to process the contract document with AI:

4. Add the Encodian ‘AI – Process Contract’ action.

4.a. File Content: Select the ‘File Content’ output from the ‘Get file content – Contract’ action.

4.b. Remove New Lines: Select ‘No’.

The processed contract is returned as a JSON dataset in the “Result” variable of the outputs of the ‘AI – Process Contract‘ action.

The following image shows the schema of the payload when it is extracted in a JSON editor.

Next we will parse the JSON output so that it can be used in subsequent actions.

4. Add the Power Automate ‘Parse JSON’ action.

4.a. Content: Select the ‘Result’ output from the ‘AI – Process Contract’ action.

4.b. Schema: Enter the JSON schema shown in the following MS Word document  ‘ParseJSONSchema‘

(Note: if using a different contract file than the ones provided, a sample schema can be generated by executing the flow, extracting the JSON output from the ‘AI – Process Contract’ action, and using the ‘Use sample payload to generate schema’ option of the ‘Parse JSON’ action.)

Finally, we will update the properties in the SharePoint ‘Contracts’ document library with the data extracted from the contract document.

5. Add the SharePoint ‘Update file properties’ action.

5.a. Site Address: Select the name of the site where you have previously created the document library ‘Contracts’.

5.b. Library Name: Select ‘Contracts’.

5.c. Id: Select the ‘ID’ property from the outputs of the ‘When a file is created (properties only)’ action.

5.d. Advanced Parameters: Select ‘Show all’.

We will use a combination of inline ‘If’ and ‘Empty’ function(s) around the property values to handle any empty or null values that may have been returned.

• Title: Select the ‘fx’ symbol and enter ‘if(empty(body(‘Parse_JSON’)?[‘Title’]),”, body(‘Parse_JSON’)?[‘Title’])’.
• Duration: Select the ‘fx’ symbol and enter ‘if(empty(body(‘Parse_JSON’)?[‘ContractDuration’]), ”, body(‘Parse_JSON’)?[‘ContractDuration’])’.
• Execution Date: Select the ‘fx’ symbol and enter ‘if(empty(body(‘Parse_JSON’)?[‘ExecutionDate’]), ”, body(‘Parse_JSON’)?[‘ExecutionDate’])’.
• Effective Date: Select the ‘fx’ symbol and enter ‘if(empty(body(‘Parse_JSON’)?[‘EffectiveDate’]),”, body(‘Parse_JSON’)?[‘EffectiveDate’])’.
• Party 1 Name: Select the ‘fx’ symbol and enter ‘if(empty(body(‘Parse_JSON’)?[‘Parties’][0]?[‘Name’]), ”, body(‘Parse_JSON’)?[‘Parties’][0]?[‘Name’])’.
• Party 1 Address: Select the ‘fx’ symbol and enter ‘if(empty(body(‘Parse_JSON’)?[‘Parties’][0]?[‘Address’]), ”, body(‘Parse_JSON’)?[‘Parties’][0]?[‘Address’])’.
• Party 2 Name: Select the ‘fx’ symbol and enter ‘if(empty(body(‘Parse_JSON’)?[‘Parties’][1]?[‘Name’]), ”, body(‘Parse_JSON’)?[‘Parties’][1]?[‘Name’])’.
• Party 2 Address: Select the ‘fx’ symbol and enter ‘if(empty(body(‘Parse_JSON’)?[‘Parties’][1]?[‘Address’]), ”, body(‘Parse_JSON’)?[‘Parties’][1]?[‘Address’])’.

Test the flow

Upload the sample contract documents to the ‘Contracts’ document library.  Await the execution of the Flow, then view the updated properties in the ‘Contracts’ document library.

Before:

After:

Next Steps and Extensions

Once you’ve automated contract processing, you can extend this flow further in so many ways. Check out these examples:

• Index properties in Microsoft Search for easy enterprise-wide discovery.
• Push structured data into Dataverse or Power BI for real-time reporting and insights.
• Combine with approval workflows to route invoices for review and sign-off.

FAQs

Q: Can Power Automate extract data from contracts automatically?
Yes. With Encodian Flowr’s ‘AI – Process Contract‘ action, you can extract structured data such as parties, execution dates and durations directly from uploaded documents.

Q: What formats are supported?
The ‘AI – Process Contract‘ action supports the following input file types:

• BMP
• HEIC
• JPEG
• JPG
• PDF
• PNG
• TIFF

Q: Can I customise the extracted files?
Yes. The AI model returns standard fields, but you can modify your downstream Power Automate flow to parse, transform, and store the data as needed.

Q: Is this secure for sensitive legal documents?
Yes. All processing occurs within Microsoft Power Automate using Encodian’s secure Azure-based infrastructure. Your data never leaves Microsoft’s PaaS environment.
If your organisation requires all data to remain completely within your Microsoft 365 tenant, we recommend exploring Encodian Dedicated Subscription options, which provide isolated processing within your own Azure environment.

For full details about this action, review the ‘AI – Process Contract’ action documentation →

Finally…

We hope this post provides a helpful guide to process contract documents using Power Automate and the Encodian Flowr connectors.

Start your free 30-day trial for Encodian Flowr and begin automating contract intelligence today.

Learn more about Flowr →

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