It’s Q4: Do You Know Where Your Contracts Are?

With Halloween at its end, October is the month for frights and scares. If you’re wondering how this theme might play into a blog focused on contract management software, just stop the ferocious pace we naturally work at these days and take a look at your calendar. What’s scary about that? If you’re like many busy professionals and business leaders, the very fact it’s already weeks into the fourth quarter of 2011 is sure to make many hearts skip a beat.

End-of-year preparations entail a slew of different tasks depending on your organization’s industry and which department your job responsibilities fall in. But undoubtedly, the vast majority of us are now reflecting on the previous nine months and amassing lessons learned into a focused strategy of shaping future plans for 2012. A smart review of your contract management system—or the plan to select and implement one—can be integral to helping you successfully wrap up this year and kick off next year on the right foot.

Consolidate Duplicative Services

It’s not rare for a company to implement a contract management software system and then begin discovering they are paying on several contracts with same or similar services. To stop that bleed of financial resources, look for an overlap of contracts you can consolidate.

A best practice to identify these opportunities is to categorize and tag contracts with customizable user-defined fields. Then, search and report on a specific category and begin to assess any patterns or trends of unnecessary coverage, overpayment, etc.

Example: maybe you opted to purchase extended warranty coverage for new computer equipment your organization purchased earlier in the year. However, the contract you signed with an external IT services provider already encompasses ongoing service and support of the same equipment. Which contract offers more services for a lower cost?

Prepare to Renegotiate Current Contracts & Agreements

If you’ve input critical dates into your system, a quick search will bring up the list of current contracts that need to be renewed—and therefore renegotiated—in the coming period. And if you are diligent in keeping track of related notes or events pertaining to each contract, you’ll benefit by building your case over time and reduce any last-minute scrambling for supporting information.

Perhaps you can reduce your cash outlay by negotiating a reduced subscription pricing plan or monthly fee schedule. Or, even maintain the current pricing structure, but enhance the arrangement by picking up an added service or benefit at no additional cost.

Example: think about your personal car insurance rates. At times of policy renewal, many insurance companies are open to renegotiating rates with profitable, long-time customers, especially when presented with quotes from competitor insurers! And if a price reduction isn’t feasible, maybe the addition of complimentary roadside assistance will suffice.

Dates to Beware

And while on the topic of highlighting critical dates in your system, pay extra attention to note any re-enroll dates that automatically take effect. You want to maintain the flexibility to proactively decide whether to continue your contractual obligations or avoid being trapped in another period of forced payments with a vendor you no longer want to engage with.

Your contract management system should support reminder alerts to keep you informed of these and other important dates that can have far-reaching implications for your business. Just one miss of a brief period to opt out of an automatic contract renewal can be frustratingly expensive over months or even years.

Example: mobile phone service providers are notorious for exploiting this tactic. Surely you know someone who didn’t take action after waiting months or more for their service contract to expire, only to be looped back in for another two years. Ask them about the personal ramifications of that mistake and then amplify it to a magnitude relative to the scale of your business. Ouch.

More Treats, Less Tricks

As you approach the final two months of 2011, your contract management software can help you: catch duplicated contractual obligations, prepare for renegotiations, and deftly maneuver around tricky automatic renewals. Considering the significance that contracts play in your everyday business governance, taking time to review the state of your agreements can reduce any unforeseen scares and make this a season to enjoy.

 

If you’re currently in the market for a contract management software solution, consider Contract Assistant™. With Contract Assistant, users in organizations of all sizes can manage their contracts and negotiated agreements with confidence by quickly accessing information, generating reports, receiving automatic reminders of critical dates, and more. Contract Assistant is available in single-user Standard Edition, multi-user PRO Edition, and powerful, SQL-based Enterprise Edition.