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How to Find the Best Contract Renewal Software

Betsy Francoeur

Contract renewals are like brakes — they may not be sexy, but boy, are they important. And just like brakes slow down your car, contract renewal time is a chance to sit down and reexamine your supplier contracts to determine if they’re still meeting your needs.

In a nutshell, contract renewal means continuity and stability for your business operations. It ensures you can keep relying on your suppliers for goods and services with no interruptions. It’s an opportunity to negotiate for better payment and delivery terms that can save you money. It also helps build trust, confidence and reputation in your supplier relationships.

Want to convince someone that contract renewals are important? Just show them this list of nasty things that could happen if you let your supplier contracts expire. Your business might:

  • Lose negotiated discounts and have to pay higher rates for products or services
  • Be at risk of breaching the agreement and possibly even face legal action
  • Lose reputation in your industry and with the specific supplier
  • Struggle with confusion or disputes because the legal protections provided by the contract are no longer in effect

Without good contract renewal practices, a contract could also auto-renew without you realizing it, meaning you missed your chance to renegotiate more favorable terms or you’re now paying for something you no longer need.

Avoiding all those unpleasant consequences is exactly why more and more businesses are using software to better manage their contract renewals. Software keeps all of your contract information in one place and alerts you when expiration dates near. Contracts are easy to find, easy to search and easy to track.

In this article, we’ll explore what contract renewal software does, why it’s a crucial component of business operations and the five key features to look for when choosing a solution.

What is contract renewal software?

Also called contract management software, it’s designed to handle the contract lifecycle from initial import to renewal or termination and all the stages in between.In general, contract renewal software:

  • Stores all of your contracts securely for easy access
  • Notifies you when contract end dates are nearing so you can take action
  • Lets you create workflows for contract reviews, approvals and changes to keep the renewal process moving smoothly
  • Allows you to analyze various aspects of your contracts, such as spend, value or risk, giving you greater visibility into your contractual relationships

Trying to do all that manually — or even using only paper (*gasp*) — is a migraine-inducing mess. Manual contract renewal management makes an already complex process even tougher.

Contracts are often stored in multiple locations (emails, desktop folders, even filing cabinets), reducing accessibility and transparency. Multiple versions of a contract may exist with no method for organizing them or confirming which one is the current, approved contract. Someone has to be in charge of keeping track of all contract expiration dates and reminding the appropriate people to review them. And even more, someone has to pore over each contract, identifying potential problem clauses, assessing the performance of the contract relationship and determining if the contract still aligns with the company’s needs.

All of this adds up to slow, labor-intensive renewal processes and very limited visibility into what you’ve agreed to, the health of your supplier relationships, opportunities to optimize spend and many other valuable metrics.

But software to the rescue! Contract renewal software streamlines, speeds up and simplifies contract management while providing transparency throughout the process. And that can have a hugely positive impact on business operations:

  • Consistent, uninterrupted supplies thanks to regularly updated and renewed contracts
  • Better contract terms due to plenty of lead time and performance data to support renegotiations
  • No extra fees or costly legal concerns due to lost or overlooked contracts
  • Improved reputation with suppliers, which can lead to special discounts and more favorable shipping options

Key features to look for in contract renewal software

Choosing a solution with these attributes ensures you have a tool with the necessary functionality and flexibility to handle your company’s contract needs long-term.

Feature 1: Automated notifications

Never miss an upcoming expiration date. Automated notifications alert the appropriate people that a contract is up for renewal and needs their attention. No need to dedicate an employee’s valuable time to firing off reminders — the system does it for you. Whether you ultimately decide to renew, renegotiate or cancel a contract, these notifications prevent any last-minute scrambling, giving your team plenty of time to take the correct action.

Feature 2: Centralized contract repository

So long, silos! All of your contracts are stored in one secure place where everyone on your team can access the information they need — no more poking through multiple programs or folders to find what you’re looking for. A good contract management solution will:

  • Make it easy to import contracts into the system and share contracts with fellow users
  • Include multi-criteria search functions to help you retrieve contracts in seconds
  • Enable you to view your overall contract landscape or drill down to specific supplier contracts

Corralling your contracts in one spot also makes it much simpler to analyze, understand and optimize your contracts, but more on that in a minute.

Feature 3: Workflow automation

Free your team from menial, manual tasks with the power of automated workflows. Look for software that lets you create workflow automations for various processes, including contract verification and activation, amendments and renewals. Leading contract management software can even automate recurring invoices against specific supplier contracts and block any requisitions that go beyond a contract’s spend limit. The more you automate, the more your team can focus on value-added work like handling unique situations and cultivating strong supplier relationships.

Feature 4: Integration capabilities

No one is an island — and your contract management software shouldn’t be either. A smooth connection with your ERP system and other software tools within the source-to-pay cycle supercharges contract renewal software. Ensure any potential solution you’re considering can integrate with your ERP environment, including multiple ERPs if necessary.

It’s also worth looking at software that’s part of a complete source-to-pay platform. When your contract management software links seamlessly with sourcing, procurement, accounts payable and supplier management solutions, it’s so much easier to ensure that every action in your company’s source-to-pay process is following your contractual obligations. 

Feature 5: Reporting & analytics

It’s like X-ray vision for contract managers. Robust reporting and analytics functionality is a must-have feature that helps you monitor operations, compliance, risk and performance. Look for contract management software that allows you to see minimum and maximum spend amounts, create alerts to monitor expenditures, track approval status and view audit trails of contract modifications. The more visibility you have into your contracts, the better you can control and optimize contractual activities. 

Bonus feature: A good partner

Ok, this one’s not technically a feature, but it’s still an important aspect to consider. Don’t just look at the software itself, look at the company that makes it. Are they positioned to be a dependable partner to you as your needs grow and change? Do they have experience in the locations and markets you do business in? How’s their customer support? Are you confident they can protect your data? Do they incorporate AI in their software thoughtfully or just for the sake of using AI? Selecting a great software backed by a great company is a win-win for your business.

Conquer contract renewals with the right software

A function as vital as to your business as contract management deserves a top-notch software solution. From securely storing all your contracts in a central location, to ensuring you never miss another expiration date, to automating time-consuming manual processes, to giving you unlimited visibility into your contracts’ lifecycles and performance, contract management software keeps your business supplies flowing smoothly.

As you explore your various software options, take a look at Esker Contract Management. It streamlines all things contracts with AI-driven automation — and it has all five features mentioned above (and then some). It’s also part of Esker’s complete source-to-pay platform with tools for sourcing, supplier management, procurement, accounts payable and expense management.

Author Bio

Betsy Francoeur

As a Copywriter at Esker, Betsy loves writing about the source-to-pay and order-to-cash cycles and creating valuable content for financial professionals. She also enjoys running 5ks, kayaking, traveling with her husband and snuggling her dog.

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