It’s important to stay on track when renewing contracts for your rebate programs as they provide a key opportunity to access the current relationship with your trading partner, measure the contract’s value and then either negotiate the best possible deal terms or terminate a trading agreement that’s no longer required.
If a rebate contract auto-renews without your knowledge, there could be serious consequences for not only yourself but your business. They won’t be able to negotiate better terms for the contract – whether that’s a new deal or a modification of the products or services currently being delivered.
The process for renewing contracts is just as significant as the first time you signed on the dotted line, so don’t let it pass you by. We discuss how you can continue to succeed at renewing contracts now and in the future.
Have a process in place for renewing contracts
Renewing contracts can easily be forgotten about, potentially causing your organization financial losses. For example, you could be duplicating spending, spending money on trading partners that are too expensive or you could even lose a vital trading partner if you don’t realize that the contract has expired. By having poor processes for renewing contracts, your business becomes exposed to multiple vulnerabilities, especially if using manual processes such as email, spreadsheets.
These manual processes can make it difficult to manage large volumes of contracts with varying renegotiation dates and renewal terms. They lack the capability to quickly address contracts that are complex or the transparency to see how clauses are worded across different departments.
Independent research conducted by the International Association for Contract & Commercial Management (IACCM) suggests poor contract management costs organizations as much as 9% of their annual revenue. Therefore, organizations must have a streamlined process for renewing contracts in place and a centralized deal repository to achieve success.
Conduct a performance review of your trading partner
By conducting a thorough performance review, you can check if your trading partner is abiding by the terms of the contract and if you are getting the best services or products to meet your needs, or could you get something better elsewhere. Look at the market to see what else is out there and consider using that information in any discussions with the trading partner when conducting renewing a contract. Also consider if you have a good relationship with them and how responsive they are to questions, requests, and complaints. At the end of the day, a collaborative relationship drives mutual growth and a better base for renewing contracts.
Record all contract dates in a centralized system
When renewing contracts for your deals there will have a number of key dates that should all be extracted and recorded into a centralized deal repository – preferably through a dedicated rebate management system. Renewal dates are the designated date by which you need to decide whether to renew or end the contract, but they may not always be clearly visible within the contract. By uploading your rebate contracts and storing contract renewal dates centrally, all relevant stakeholders in your team can be made aware – reducing the chances of the date passing by unnoticed.
Ensure you have plenty of time for renewing contracts
Renewing contracts should never be a snap decision. Finding out that a contract is about to renew, and having to make a quick decision, can have significant, and often negative, consequences for your business. Sort out your plan ahead of time by discussing goals with your key stakeholders and going over any concerns you encountered with the previous contract such as any unfavoured deals. Having the organization’s top priorities and a few well-chosen alternative options in mind can put you in a strong position to make choices that will benefit the organization.
The easiest way to ensure you’re well prepared when renewing contracts is to build in ample review time. Our advice is to start preparing six months before the relevant renewal dates, you may think this sounds like a long lead time, but early preparation is important if you want to extract maximum value from your contract renewals. You could also set automatic reminders to review contracts which will keep a contract renewal date from sneaking up on you.
Negotiate an even better deal
Negotiating rebate deals is one of the first priorities that should come to mind when renewing contracts for your deals. Large organizations can manage thousands of contracts and rely on many trading partners to increase their ROI. Could there be a deal mechanism that you haven’t taken advantage of yet? For example, we have come across over 300 different types of deals and we’ve mapped all of those options into our rebate management software.
Form a good relationship with your trading partner
Establishing a healthy working relationship with your trading partner will help negotiations go smoother when renewing contracts. You may not enjoy having to renew contracts every year, but it does come with its fair share of benefits. Some vendors may automatically give you a discount upon renewal to foster good relations, but others won’t. For this reason, you must take it upon yourself to negotiate better deal terms.
Make signing contracts simple
Once you’ve finalized the contract renewal for your deals, it’s time to collect any much needed signatures from all signing parties. Depending on the renewal terms there could be a pile of paperwork for various parties to sign. E-signatures can be more convenient than mailing or faxing hard copies. A rebate management system with e-signature capabilities can make it easy to send important documents, collect signatures, and store completed documents in a secure cloud-based system.
Succeed at renewing contracts with Enable
If your current way of renewing contracts is letting you down it’s time to start thinking about automating it. Enable’s collaborative platform provides a more streamlined contract renewal process allowing you to store and sign all your contracts. Plus it comes with an automated workflow so you can see a breakdown of who the contract lead is, who it is currently with, who you are waiting on, and the last updated date.