Contracts are an important aspect of any business. These contracts document the relationship between the business and its clients or partners. Renewal can be different for different businesses. Maybe you are managing one or several contracts with end user clients, or maybe you are want to renew contracts with suppliers. Maybe you have to renew a contract with that one client who is responsible for a major share of your revenue. Getting a new contract is a much celebrated event. It opens new horizons for the organization. However, it is a different story when it comes to renewal of the same contract. It is not negligence on part of employees; rather, sales reps and contract managers have a lot on their plate creating new leads for the organization, and a renewal date might slip through their overburdened attention. Failure to renew contracts on time affects the profitability of the business as contracts are pivotal to revenue generation.

Lets consider a traditional business consulting company that offers a range of services to a number of organisations. Their consultants lend their expertise in business strategy, process and program management to their clients, helping them realize their goals and profits. As this consulting firm is very good in what it does, they handle numerous projects and clients, resulting in loads of contracts. However, with so many contracts being signed, it is easy to overlook the deadline on few or several of them. This can be catastrophic for the brand image of the firm. It is also bad for revenue, and leads to negative publicity. So, what can be done to avoid this?

Tracking contract renewal:

Significance:

Tracking contract renewals provides organizations an opportunity to modify and renew existing contracts to maximize their gain or continue a successful partnership. A renewal mechanism in place also helps sales and contract teams to work more efficiently, and helps them keep track of existing as well as new leads. An organization going for a renewal meeting with a well prepared contract tends to have the upper hand in negotiations.

Conventional tracking:

Traditionally, organisations use emails and calendars to track contract renewal deadlines. They mark up renewal dates on their calendars, set reminders and use emails for their correspondences and approvals. On paper, it sounds simple and effective but in reality, it isn't. Each renewal process has numerous elements and often requires approval from different members of the organization. Also, this approval process is repeated for every iteration of the contract, leading to increased complexity, more emails, messy paperwork and use of more resources than needed. This becomes even more chaotic if the final draft is rejected by the client and the process has to be repeated again. This is the case with only one contract. Imagine the situation for an organization that has to handle 40, 400, 4000 or maybe 40000 contracts? In all this renewal rush, important client data such as renewal dates, invoices or other data may get corrupted or lost, which can cause an unpleasant situation between the concerned parties. All this leads to the conclusion that we need to revisit our traditional approaches to contract renewal.

Tracking renewal on IBISM:

An operations head of any business that handles a lot of contracts, must search for a cost effective and simple tool to automate organisational processes. The goal for contract renewal tracking is to ensure a smooth contract renewal within the expiration deadline. With IBISM, organizations can easily keep track of contract renewals. Our field level validations make sure that errors are minimised at the point of entry. This results in quicker approvals, without the need for repeated editing. Features like notifications, to-do lists etc. ensure that deadlines are never missed. Problem of data distortion is solved using well structured workflows and forms created with IBISM's Visual Workflow tools. The ability to track contract renewals effectively increases the veracity of contract invoicing and improves the possibility of restructuring profitable deals.

Apart from automating contract renewal processes, it is possible to automate other financial and administrative processes too. For more information on how to successfully automate contract renewal or other aspects of your business, feel free to contact IBISM. We will be happy to answer all your queries and also provide you with a free demo.

Published on Mar 20, 2018