Contract renewals play an essential part in the contract lifecycle management. The decision to renew or cancel a contract can determine the profitability of the organization since contracts have financial implications. Contract renewals are intertwined with the performance of contracts throughout its lifecycle. The contract’s worth and the profit it had provided over a period are a few of the factors that are measured by the contract management team before the decision to renew or possibly terminate it depends.

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When an organization is dealing with several contracts, the process might get complex at a certain point without a sturdy system in place. When contracts are not reviewed timely for renewal or cancellation, it has adverse effects on the company and might increase the costs or result in a financial loss. It is prudent to instill a reliable contract management software that enables the company with the whole contract management process to avoid such management mishaps.

Benefits of the Contract Renewal System

  1. Efficient Management

    The contract renewal system facilitates the company to stay abreast of the contract process. Generally, the contract due dates or valid till dates are priorly decided upon before the execution. However, it is the responsibility of the contract management team to track the dates and evaluate the performance of the contracts. With the Contract management software system, the managing team can efficiently note the expiry dates of the contracts in the centralized dashboard. Through this feature, the team can followup on the upcoming expiry dates and analyze it proactively.

  2. Remote Access

    With the pandemic being rampant, remote working has become the norm. A beneficial feature of the contract lifecycle management software is that the managers can access the cloud server remotely and stay in line with the contract process. It is especially advantageous when it comes to tracking the contract renewal dates. With the complete database of contracts made accessible, the managers can efficiently track, evaluate, and determine the renewal of active contracts.

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  3. Evaluation

    Renewing a contract without proper evaluation can affect the company in several ways. With the contract renewal feature in the contract lifecycle management software, the managing team can fix dates for contract evaluation. The period of the appraisal must be before the expiry of the contract, therefore giving adequate time for the team to review the parameters of measurement of the contracts. A few notable parameters include,

    • Period of the contract
    • Performance rate during the effective period
    • Networth of the contract
    • Performance of the previous contracts employed
    • Revenue generated during the contractual period
    • Compliance percent of contract terms and conditions
    • Negotiations made during the effective period
    • Changes and Additions made to the original contract, and more.

    Based on these parameters, the team would evaluate the contract and make recommendations on the renewal of the contract to the management. Based on the findings, the company can make informed decisions regarding the renewal of contracts.

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  4. Reminders

    An underrated benefit of the contract management software is the notifications feature. The team can effectively add reminders about contracts. With timely reminders set accordingly, the team can rest assured that every contract will be made accountable at the end of its lifecycle. With the option of setting timely reminders on a regular interval, the team is effectively enabled to set reminders for every step in analyzing contracts.

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