Contract Renewal: The Ultimate Guide For Your Business
Table of Contents:
- What is agreement renewal?
- Why is the renewal agreement important?
- How and when should you renew a contract?
- Benefits of automated contract renewal
There are many steps to business success and a proper process for contract renewal is definitely one of them. Find out what this entails, what your options for contract renewal are, and how to make the most out of them.
What is agreement renewal?
Contract or agreement renewal is the action you take when you want to stay in business with someone.
When you sign a contract, you usually agree to both a start date and an expiration date. Once the expiration date passes, the contract is no longer effective. If you want to continue working with someone, the solution is simple. You only need to renew the contract that’s about to expire.
Automatically renewing contracts
Of course, a lot of contracts these days have automatic renewal clauses. When you sign a contract containing this type of clause, it stays effective until you choose to end it. Even in such cases, however, you’ll want to review the contract before you let it renew automatically.
Now that you understand what an agreement renewal is, you’ll probably want to know why this is so important.
Why is the renewal of agreement important?
It doesn’t matter whether you only ever sign contracts with your clients or with your service providers. As argued by Forbes, the renewal of agreement or contract plays a vital role in the success of any business. This is because it helps you:
- Keep better track of the value you get from service providers.
- Stay in better business relationships with your clients.
When it comes to service providers, staying on top of all the contracts makes you regularly reevaluate these business arrangements. As a result, you’re aware of any loss of value or potential for increase in value for your business.
When it comes to clients, proper contract lifecycle management helps you avoid potential oversights. As you already know, any such oversight carries the risk of losing the client once and for all.
Now that you know the importance of the renewal of agreement, you might want to learn more about the process.
How and when should you renew a contract?
As you already know, a contract usually includes an expiration date. If you don’t want it to expire, you’ll need to take action before this date. As for how you should do this, there are two ways to renew a contract:
- Manual contract renewal
- Automated contract renewal
What’s the difference?
With manual contract renewal, you’re in charge of the entire process. You need to keep the expiration date and any other tasks in mind. Also, if you want a more streamlined process, you need to find a way to keep track of all your contracts and obligations.
With automated contract renewal, on the other hand, you use a platform for contract management such as Contractbook. You already have everything you need to streamline the process, and the platform itself keeps track of all your contracts and obligations. However, these are not all the benefits of an automated contract renewal process.
Benefits of automated contract renewal
An automated contract renewal process makes doing business so much simpler. Here’s what it can do for you:
- Save time and minimize paperwork
- Reduce risk of operational delays
- Improve customer retention rates
With Contractbook, you switch the ever-increasing heap of files for a single streamlined contract repository. This in itself saves time and minimizes paperwork. However, it does so even more when you choose to use our automation tools.
When you use our automated contract renewal process, you make sure no contract ever expires unless you want it to. As a result, you’re always up to date with the obligations toward your service providers. That is, there’s no risk of negative impacts of service cut-off.
Last but not least, with our automated renewal process, you stay on top of all your client contract obligations. This makes it easy for you to keep your long-term customers and, in turn, improve your customer retention rates.
Do you want to make contract renewal easier for yourself? Get in touch and we’ll take care of all your needs.