For B2B service providers, such as those in the technology and software space, contract renewals are crucial to your business’s growth and profitability. But renewals aren’t a given—your success in this area heavily relies on your renewal management!
So, how do you manage renewals? Are you using outdated and inefficient manual methods, or have you upgraded to an automatic contract renewal process? If not, it’s time to reassess your system and invest in automation.
Manual contract renewals create more work for your team and leave room for errors and oversights that could cost you clients and unnecessary expenses. One survey found that 96% of respondents believe human error impacts contract processes at least sometimes. Nearly half say it’s hard to find information in completed contracts and understand the terms and responsibilities.
Other research found that weak contract processes result in an average value leakage of about 9.2% of company revenue. Talk about leaving money on the table!
An effective contract management system should include advanced planning and administration of your contracts with everyone, from your clients to your vendors to your partners to your employees. It should be automated, and renewal discussions should take place early, not right before the contract expires! After all, it’s also an opportunity for both parties to renegotiate and improve the terms seamlessly.
Let’s explore the differences between manual and automatic renewal management so you understand the various options and what will work best for your business.
Proper manual contract renewal management requires extensive processes and a hefty amount of work, thanks to decentralized databases, spreadsheets, and communication. This can lead to:
As you can see, each disadvantage can cause a ripple effect, costing your company time, money, and even your reputation. Manual contract management is simply not sustainable for business growth. That’s why we recommend automatic contract management to mitigate human error, streamline the process, and make your business more profitable.
When it comes to B2B technology, we are all for automation in as many areas of your biz as possible—including contracts! Automatic contract renewal management entails using contract lifecycle management (CLM) software to renew contracts free of manual work, typically by a set expiration date. The original agreement will include a contract renewal clause stating the renewal terms and period. Auto-renew will occur unless one party notifies the other that they wish to change or cancel their contract.
Incorporating CLM software into your contract renewal strategy will benefit your business. Let’s dive into these advantages below.
One of the most prevalent advantages of auto-renewals is the efficiency. Forty-three percent agree that it reduces manual work.
With auto-renewals, there is no need to renegotiate as long as both parties are happy with the contract as-is. That means your team spends less time reviewing, updating, and performing tedious tasks. And you won’t have to engage your sales team for renewal discussions.
If renegotiation is necessary, CLM software ensures the conversations occur early and quickly. It will remind your clients of their upcoming renewal and allow you to notify them of the next steps, outlining what to do if they’d like to discuss the terms of their contract and speeding up the approval process.
Your team will have more time to focus on their primary responsibilities, which will become apparent from the following features and benefits!
Without paperwork, services will be delivered faster whether you receive or perform them. Automatic renewals prevent service interruption, meaning you or your customers won’t be stuck without a vital business function—keeping everyone happy!
Not to mention, automation optimizes your financial insights and circumstances by:
Automatic renewal management tools streamline your processes and create accountability from request to approval. This provides sufficient time for your legal team to review the contracts. The software prevents essential terms from being deleted and ensures only the relevant people can access the document. Overall, you’ll have more control over contract documentation.
A thorough and efficient contract management process ensures the terms and conditions of your contracts are updated and legal. With CLM software, you will:
Contract renewal software also protects your company from risk by allowing you to create audit trails, ensuring you can access all contract history quickly and accurately. You’ll be able to provide all required documentation to demonstrate policy compliance.
When all documentation is organized in a central location, your team can easily and quickly find any contracts and documents necessary. No more hunting for files in scattered storage, whether digital or physical. Many agree—41% say that CLMs help them find archived documents, while 38% say it improves contract visibility.
CLM platforms even include features to scan paper documents into the repository, complete with automatic image or optical character recognition. Employees can also import electronic contacts, note document status and details, and retain all contract versions in one place.
And with a centralized database comes stronger compliance and reporting! Your legal team and other staff can collaborate to ensure they are using the latest contract templates and clauses. Everything is available remotely via a password-protected website as long as employees have an internet connection. Forget about delays due to lack of access!
Automatic contract renewal systems allow you to set rules and alerts. Not only will you never miss another renewal date, but you can set reminders well before expiration dates and have any necessary renewal or renegotiation discussions early! You can even create custom settings like recurring alarms, which will ping team members until they perform the required action.
At the end of the day, automatic contract renewal eases the entire process, boosts your bottom line, and promotes your business growth!
Although automatic contract renewals offer many benefits for your business, they still require setup, knowledge, and management. Not to mention, the contract renewal process, in general, entails sales knowledge and experience.
However, you can take it to the next level by working with an outsourced call center to take most of the process out of your team’s hands! They’ll understand contract renewal management best practices and strengthen your strategy by:
Contract management is one significant business challenge a call center can handle for you, opening you up to new opportunities and growth.
As you consider ways to maximize your existing client base, remember that renewal management is where it’s at! But remember, a manual process won’t cut it anymore—it simply requires too many moving parts, resources, and employee hours. Then there’s the potential you could be leaving behind with missed opportunities and errors.
Automatic contract renewals are well worth the investment. They streamline processes, reduce necessary human work, and minimize mistakes and risks. A CLM platform will help your team ensure no contract slips between the cracks.
If you’re ready to offload this crucial piece of the sales process from your team’s responsibilities and partner with a call center, Chameleon Group can help! Learn more about our inside sales solutions, or contact us today.
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