In this year's State of Contract Management Report, respondents reported that contract renewals were one of the top 10 challenges they face.
If your business relies on recurring revenue, odds are you deal with contract renewals. And with renewals comes the need to store your agreements.
If you're a Salesforce user, Salesforce has a module that your organization can leverage to manage the data contained in an agreement. Normally there are important key terms that you need to track, one of the most important being contract renewal.
When I'm talking with prospects, here are the contract management alternatives that I often see.
While these methods may work for some, they're not recommended as they may expose a company to risk. Data breaches, data loss, account hijacking, insecure APIs, and denial of service, are all very real risks.
It’s important to have a system in place to store key terms and track the approval process. Best practice is to have an automated trigger that will remind the user when agreements are up for expiration.
Many times there is an approval process that is required before the contract is executed. Also, many individuals may need to be part of the workflow for the renewals.
Another best practice is to make sure that all stakeholders are in the loop to avoid complications with billing or any legal obligations. Are there any new terms or standard clauses that should be added to the renewal? If so, you should look at incorporating those items if they are relevant to the contract.
If your term expires, it can negatively affect the relationship with your customer or your vendors. It’s important that when contracts are loaded into Salesforce all the terms in the paper agreement are tagged to a document and have the right approvals.
By following this process you can develop a proactive action plan to stay ahead of expiring contracts. One of the best ways to do this is by leveraging the contract module in Salesforce, along with a cloud document management platform to ensure a one-stop solution.
Editor's Note: This post was originally published in February 2015. It has been updated for accuracy and comprehensiveness.