If an up-and-coming business or one that has been around for years has neglected to manage its contract renewals efficiently, there’s a high chance that it's going to set the company back in a number of ways.
Without being notified on time of your renewed contract with business partners, vendors, clients, and so on, you might end up with a business deal that isn’t exactly bringing your venture any profit and may even prove to be expensive (for another year at least).
Mismanagement of contract renewals could also lead to an organization not being able to appraise a particular contract relationship in an objective manner so that you can accurately measure its value, renegotiate the terms, and so on.
What is Contract Renewal?
Before understanding the key ways through which you can run an efficient contract renewal process, let’s first talk about what a contract renewal actually means.
In the simplest of terms, contract renewal is a process wherein an automatic renewal occurs between businesses and suppliers or, in other cases, between the consumers of goods and services (usually after a year of drawing up the contract). After the initial term is up, both parties may decide to change existing terms, renegotiate and so forth.
Steps to Improve Your Contract Renewal Process
In order for an organisation to be able to continue providing goods and services to customers, manage their relationships with their suppliers & service providers, businesses need to ensure that everything is in place. A contract renewal process is able to guarantee that all business dealings with the above-mentioned parties are legally protected in order for the business to gain maximum profit and benefits in the future. As such, the following steps would aid in improving your business’ contract renewal process.
1. Record all contract dates centrally
Essentially, a contract renewal depends on the renewal date of a specific contract. As such, should a business decide to further their dealings with a particular supplier or venture to close their dealings entirely, the renewal date is when such a decision is made. Consequently, if the recording of the renewal date is added into a central register, it would certainly make things more efficient for businesses.
2. Build in a contract review process and make time for it
For businesses to make the best out of their contracts, they need sufficient warning in order to assess the actual value of their current contract. The organization might also want to conclude whether they have other profit-inducing alternatives and oversee and resolve disputes that might have arisen during the said contract period. As such, businesses need to schedule a prior date in order to finish all these tasks. A contract reminder software just might be what organizations need for such an assignment.
3. Negotiate from a position of strength
Once you have the full picture of what your contract renewal is going to look like and how best you can profit from a specific contract, you can take a call on whether you want to renew a contract. But businesses must make sure that they are aware of all the variables and alternatives at hand before renewing.
Best Practices for Obtaining Contract Renewal Opportunities With Vendors
Your contract renewal with your supplier is an opportunity for you to improve upon your current contracts and furnish new standards that could affect your business positively. You can even come up with new organizational strategies for the next year-round. As such, it is important to keep a few things in mind before renewing your contract with a supplier.
Communicate and Build Relationships from the Start
Businesses must consider the potential for renewal right after a contract is drawn up if they don’t want to constantly look for new suppliers and if vendors want a steady source of income. Consequently, communicating regularly, maintaining a healthy relationship with counter parties would certainly help matters. After all, it is this relationship that strengthens chances of renewal.
Leverage renewal process automation Platforms
With an efficient Customer Relationship Management (CRM) platform in place, businesses would be able to review, manage and gain insights into the positive aspects of each contract signed. You can also bank on CRMs to keep track of things during the entire length of a contract period aside from being able to furnish data on the efficiency of contracts and their subsequent deadlines.
Hold yearly reviews
Although this seems like an obvious point, most businesses neglect holding reviews of contracts that can easily be done at least once a year. Such an evaluation would ensure that an organization has taken the right decision in renewing a contract and whether it is bringing sufficient value to a venture.
Refine the Contract
By refining contracts regularly, companies would be able to foresee what changes need to be made before renewal and whether a contract would require certain updates in order for it to be profitable to a business. As a result, companies can bank on their revenues increasing significantly with the added bonus of seeing their business scaling to greater heights.
How Breakout Can Help You Automate Your Contract Renewal Process?
Through the length of this article, we’ve come to learn what an efficient contract renewal process can do for a business. Imagine having a tool that can accomplish all of the above-mentioned tasks in a seamless manner.
Enter Breakout - an intelligent process automation tool such as that is able to simplify an otherwise tedious and oft-forgotten process. Here’s how automation tools can aid businesses in their contract renewal journey:
- Contract renewals can become a much quicker and simpler task leading to a larger number of contract renewals for businesses dealing with thousands of contracts.
- Businesses would be able to assess risks, renew contracts on time and make sensible negotiations with the aid of automation systems such as Breakout.
- Receive calendar alerts and reminders that are entirely automated.
- A fully furnished audit trail would allow companies to track every contract that is scheduled for renewal and other changes that might be made in a contract.