Are Your Vendor Contracts Past Their Sell-by Date?

“How many of your contracts are due for renewal this month?”

If this question is being asked to any CPO, do you think the answer will come in handy or in a fraction of seconds? Most probably no, and it isn’t their fault as well. There are so many activities they are involved in. Your procurement teams work hard, day and night, to effectively negotiate contracts that enforce the most beneficial supplier terms for your organization. Likewise, once the contract is signed, your accounts payable team takes all possible careful measures to ensure that each invoice is paid on time and the process is in the flow.

However, one section of contract management that’s often overlooked by finance teams is the expiration date. Expired contracts are usually more expensive than usual, how and why?

An expired contract can have serious repercussions on your business operations and could cost you a lot if you’re unaware of its pending arrival.

If contracts are not renewed at the time of expiration, it can pose serious legal as well as financial risks:

Read more about the consequences of expired contracts here:

Solution

The key to ensuring that an expired contract isn’t kept on foot is to engage in good contract management. Know your contract and monitor contract performance. Be aware of deadlines and notice periods, and communicate and document any changes. The simplest way to avoid working under expired contracts is to embrace contract renewal automation. Have a contract management solution in a place that helps you identify and extract key milestones and important dates pertaining to all your contracts. There are several AI-enabled vendor contract management solutions available. These solutions send triggers and notifications of contracts that are about to expire and the contracts that are due for renewal.

One such solution is Aavenir Contractflow, built on ServiceNow, take a look here!