Common contractions like can't, don't, isn't, won't, shouldn't, and it's are fine to leave in the abbreviated form. Spelling them out in their full form presents a more formal tone and takes up space.
However, there are two occassions when contractions must not be used:
INCORRECT: Microsoft® Word's® one of the programs most used by writers.
CORRECT: Microsoft® Word® is one of the programs most used by writers.
INCORRECT: The Writergrrls'll have a meeting next week.
CORRECT: The Writergrrls will have a meeting next week.
There are two common errors made with contractions.
Taken from Microsoft Style for Technical Publications