As the business grows, so does the number of contracts and their complexity. Suddenly, the likelihood of overlooking renewal dates or a critical termination becomes very real. A vendor you wanted to quit working with suddenly sends their retainer next year, but you are forced to pay because you missed the notice deadline. Do you know where the contract is located? How much time will you have to spend trying to get out of paying for another year?
Missing contract deadlines generates unnecessary legal spend, and doesn’t send a good impression to the company’s CFO. In times where the general counsel is seen as a trusted business advisor, forgetting renewal dates impacts your position negatively.
In this article we’ll explore how you can leverage contract management solutions to gain control of the contract renewal process.
Manual contract renewal management exposes the business to risk
Organisations need processes in place for contract renewal management especially as the business continues to grow. Manual processes for contract tracking, including storing valuable contract data in spreadsheets, emails and disconnected databases make it almost impossible to manage contracts with different renewal dates and terms.
Furthermore, managing the contracting process manually renewals especially when contracts are complex. Consider the following scenario from one of our customers. Before using Legisway, they carried out the contracting process manually, and missed a notice period on a contract they had no intention of renewing. By the time it came to their attention, the other party had already sent the invoice for the upcoming year. As a result, the company was stuck for another year with a vendor they didn’t want and paying an invoice worth six figures! Read our article for more information on how inefficient contract management exposes the business to risk.
Advantages of contract management solutions for contract renewals
Contract management software offers the ability to send contract owners automated renewals before the notice period so the contract can be renewed or terminated in a timely manner. Consider the following benefits of automated renewals:
- No paperwork involved, so the contract can be renewed faster compared to manual processes
- Easier to manage even when you have large volumes of contracts
- Less time spent on contract negotiations, if both parties are happy with the terms means there’s less time spent on meetings and redlining
- Peace of mind that contracts are renewed in a timely manner
- Reduced exposure to financial and legal risks, while enabling business growth
Takeaway: benefits of using contract management software
Renewing a contract doesn’t have to be risky. By leveraging contract management software to automate contract renewals, the legal department can drive sustainable growth while reducing financial risk. After all, renewing or terminating contracts on time is probably the easiest return on investment. For more information on how to automate the contract lifecycle, including the renewal process, check out our article on best practices for contract management.