Why contract management is important to never miss a contract deadline
Managing a contract portfolio properly can be a real challenge, especially when the company grows. The number of contracts increases, yet the policy on them stays the same. As a former CFO, our CEO Steven Debrauwere has seen organizations use tools like Excel and e-mail to follow up contracts, which are extremely limited as far as access and security go. Inevitably, contracts got renewed without anyone being able to renegotiate or end the agreement. In this blog post, we'll teach you how to easily get on top of your contracts again by automating your contract renewal process.
Why managing contracts manually does not work
Missing contract renewal deadlines on a structural basis frequently lead to lost opportunities and increased costs and risks. Often, this is the result of managing contracts manually. When organizations depend on Excel sheets and shared drives, reaching consistency, consolidation, and safety is very difficult due to several reasons:
- Lack of overview
Contracts are sent back and forth by e-mail and, as a result, are stored on different computers, get duplicated and exist in numerous versions. The deadline of a contract can be easily missed, since the status of the contract is unclear.
- No regulated workflows
Before a contract gets signed, multiple people in different roles (such as legal counsel and CFO) need to read it carefully and give their approval. When the contracts are dispersed throughout shared drives and/or in e-mailboxes, there is no supervision on who did their task, making it easy to miss a deadline.
“Even if your Excel spreadsheet is up-to-date and keeps track of the expiry dates properly, you still face the challenge of locating the contract in time.”
How to automate contract renewals
Traditionally, contract renewal management is an unsystematic and manual process. In addition, when you want to get the most out of the momentum, it can be highly time-consuming. By automating the contract renewal process, risk of errors, missed deadlines and costly overpayments are eliminated in the long run. But how do you automate this process without losing grip, overview and control over the status of the contracts?
By either setting up a contract renewal strategy yourself, or using a specialized contract reminder software, like Contractify.
Contract renewal strategy
A contract renewal strategy should be focused on being aware of the content of your contracts, making a decision accordingly, and never missing a deadline again. Start by setting up:
- Automatic reminders: figure out the end dates of your contracts and set a reminder to review well in advance. This enables you to decide whether you would like to renew, renegotiate or even terminate the agreement, rather than that the decision being forced upon you.
- Opt-out conditions: some contracts require a performance before they can be changed or terminated. Think about returning a piece of equipment or fulfilling a final payment. As a business, you should be ready, so terminating a contract won’t lead to any problems.
- Labels: contracts come in various legal forms. Label the contracts accordingly, so you know whether the contract continues with the previous terms, whether changed terms are applied after a certain time or negotiation must occur to renew.
Surely, creating a contract renewal strategy yourself will help you to stay ahead of forthcoming deadlines. Yet, think about the benefits of having an automated dashboard that shows you every upcoming deadline and the related tasks with just one click of a button. Know that this is perfectly possible with contract reminder software.
Specialized contract reminder software
Making the switch to a contract renewal solution, like Contractify, will increase efficiency and security and decrease lost opportunities and frustrations. Let technology do the boring work, never miss a deadline again and:
- Always include only the right people in the process;
- automate your data collection and tracking;
- Save time and minimize paperwork.