Contracts serve as the backbone of relationships between companies, clients, and vendors. These legally binding documents outline the terms, conditions, and obligations that ensure smooth and mutually beneficial operations. However, the effectiveness of these agreements hinges on the ability to manage them proactively and efficiently. A significant pain point for many businesses is the failure to track and meet critical contract deadlines, such as renewals, terminations, or renegotiation periods. This oversight can lead to automatic renewals of unfavorable contracts, missed opportunities for renegotiation, and ultimately, lost revenue or unnecessary expenses.
In this blog post, we will explore the challenges that businesses face when managing contract deadlines manually, the benefits of implementing a Contract Lifecycle Management (CLM) system with automated alerts, and how such a system can help businesses stay ahead of critical deadlines, ensuring they never miss an important renewal, expiration, or renegotiation opportunity.
The Challenges of Managing Contract Deadlines Manually
Managing contract deadlines manually is a daunting task, especially for businesses that handle a large volume of contracts across various departments. Without an automated system in place, businesses often rely on spreadsheets, calendar reminders, or manual tracking methods to monitor key contract dates. These approaches, while functional to an extent, are prone to human error and can quickly become overwhelming as the number of contracts grows. Here are some common challenges associated with manual contract management:
1. Missed Renewal and Expiration Dates
One of the most significant risks of manual contract management is the potential to miss critical renewal or expiration dates. Contracts often include specific timeframes within which a company must notify the other party of its intent to renew, renegotiate, or terminate the agreement. Failing to track these dates accurately can result in the automatic renewal of unfavorable contracts, locking the business into terms that may no longer be advantageous. Alternatively, a missed expiration date could lead to the unintended lapse of a valuable contract, resulting in lost business opportunities or disruptions in service.
2. Increased Risk of Unfavorable Terms
When contract deadlines are not effectively managed, businesses may find themselves subject to unfavorable terms that could have been renegotiated had they acted in a timely manner. For instance, a vendor contract might include a clause that allows for price increases upon renewal, or a service agreement might automatically extend for a longer term with less favorable conditions. Without timely reminders and alerts, businesses may miss the opportunity to renegotiate these terms, resulting in increased costs or reduced benefits.
3. Overwhelmed Contract Management Teams
For teams responsible for managing contracts, manually tracking deadlines can be incredibly time-consuming and prone to mistakes. The sheer volume of contracts, each with its own unique set of dates and conditions, can quickly overwhelm even the most organised teams. This can lead to overlooked details, delayed decision-making, and ultimately, a reactive rather than proactive approach to contract management.
4. Lost Revenue and Missed Opportunities
Missed deadlines and poor contract management can have a direct impact on a company's bottom line. For example, failing to terminate a contract on time could result in continued payments for services that are no longer needed. Similarly, missing a renegotiation window could mean passing up the chance to secure more favorable pricing or terms that would positively impact the business's financial performance. Over time, these missed opportunities can add up, leading to significant financial losses.
The Solution: Automated Alerts with a CLM System
To overcome the challenges of manual contract management and ensure that critical deadlines are never missed, businesses need a more efficient and reliable solution. This is where a Contract Lifecycle Management (CLM) system with automated alerts comes into play. A CLM system is designed to streamline and automate the entire contract management process, from creation and negotiation to execution and renewal. One of the most valuable features of a CLM system is its ability to provide automated notifications for key contract milestones. Here’s how it works and the benefits it offers:
1. Timely Notifications for Critical Deadlines
A CLM system with automated alerts ensures that businesses receive timely notifications for all critical contract deadlines, including renewals, expirations, and renegotiation periods. These alerts can be customised based on the business’s needs, allowing teams to receive reminders well in advance of important dates. This proactive approach gives businesses the time they need to review contract terms, assess their options, and make informed decisions about how to proceed. By staying ahead of deadlines, businesses can avoid the pitfalls of automatic renewals and missed opportunities.
2. Reduced Risk of Unfavorable Renewals
With automated alerts, businesses are less likely to find themselves locked into unfavorable contract terms. The system can be configured to notify relevant stakeholders as a renewal date approaches, prompting them to review the contract and determine whether it is still in the company’s best interest to renew. If the terms are no longer favorable, the business has the opportunity to renegotiate or explore alternative options. This level of control helps to ensure that every contract is aligned with the company’s current needs and goals.
3. Improved Efficiency for Contract Management Teams
By automating the process of tracking and managing contract deadlines, a CLM system significantly reduces the workload for contract management teams. Instead of manually monitoring each contract, the system does the heavy lifting, allowing teams to focus on higher-value tasks such as contract analysis and strategy development. This not only improves efficiency but also reduces the risk of human error, leading to more accurate and reliable contract management.
4. Maximised Revenue and Cost Savings
Automated alerts help businesses maximise revenue and cost savings by ensuring that no opportunity is missed. For example, timely notifications of upcoming renegotiation periods allow businesses to secure better pricing or terms that could enhance their profitability. Similarly, by avoiding unnecessary renewals of outdated contracts, businesses can eliminate redundant expenses and redirect resources to more strategic initiatives. Over time, these benefits contribute to a healthier bottom line and a more competitive position in the market.
Key Benefits of a CLM System with Automated Alerts
Implementing a CLM system with automated alerts offers numerous benefits that can transform the way businesses manage their contracts. Here are some of the key advantages:
· Proactive Management: Automated alerts enable businesses to take a proactive approach to contract management, ensuring that critical deadlines are never missed.
· Enhanced Decision-Making: With timely notifications, businesses have the information they need to make informed decisions about renewals, terminations, and renegotiations.
· Risk Mitigation: Automated alerts reduce the risk of being locked into unfavorable contract terms or missing key opportunities, helping businesses avoid costly mistakes.
· Increased Efficiency: By automating the tracking of contract deadlines, a CLM system frees up valuable time for contract management teams, allowing them to focus on strategic activities.
· Improved Financial Performance: By maximising revenue opportunities and eliminating unnecessary expenses, a CLM system with automated alerts contributes to a stronger bottom line.
Never Miss a Deadline with Automated Alerts
In the world of contract management, staying ahead of critical deadlines is essential for maintaining strong business relationships, optimising costs, and maximising revenue. However, without the right tools, managing these deadlines manually can be a complex and error-prone process.
A Contract Lifecycle Management (CLM) system with automated alerts offers a powerful solution to this challenge. SaaSam is a recognised partner of Agiloft and we have been leveraging Agiloft’s no-code CLM platform for 12+ years. By implementing an Agiloft Contract Lifecycle Management (CLM) system, you can ensure that business never misses an important deadline. This proactive approach helps to reduce the risk of unfavorable contract renewals, improves decision-making, and enhances overall contract management efficiency.
Don’t let missed deadlines hold your business back. Invest in a CLM system with automated alerts and stay ahead of the curve, ensuring that your contracts are always aligned with your business goals and that you never miss an opportunity to optimise your agreements. With the right system in place, you can achieve greater control, efficiency, and success in managing your contracts.
If your organisation would like to make the jump to higher level of contract management maturity with the Agiloft Contract Lifecycle Management solution, reach out to SaaSam here!
About SaaSam
SaaSam is a global software consulting and implementation provider, with a proud association and history of delivering solutions through software. SaaSam has been leveraging some of the world’s most innovative no-code and low-code software platforms that empower our customers to drive business outcomes.
SaaSam is headquartered in Cambridge, New Zealand. We have a team of 26 expert employees spread across five company offices in New Zealand, Australia, the United Kingdom, the European Union (Ireland), and the United States. SaaSam has long-standing relationships with a diverse range of successful organisations across the following industries: IT and Telecommunications, Finance and Banking, Primary Industries (mining and horticulture), Pharmaceuticals and Biotechnology, Utilities, Government bodies and many others.
Our culture, driven by values of Integrity, Innovation, Commitment, Passion, and Accountability, embodies the Kiwi spirit.
