Contract Management – The Downside of Auto-Renewals

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The Downside of Auto-Renewals

If your contracts department suffers from a checkered past and an under-resourced or disorganized present, the prospect of auto-renewed contracts can seem like an answer to your prayers. If each contract renewal represents a scramble to find the original paperwork, verify that all performance criteria have been met, and then chase multiple approvals before submission to Legal for signatures, it’s no wonder you’re ready to switch every contract over to auto-renewal. For your company, negotiating locked-in discounts for the second and third years (provided all performance expectations are met) can be very attractive too, but once you move beyond the short-term horizon, much of what you’re projecting is speculation at best.

Promise vs. Practice

Saved money always looks great on a spreadsheet, but such commitments can keep you from future cost reductions if a new competing vendor enters the market or if new technology dramatically alters how you do business in the future. For this reason, contract renewals, even those already set-up for auto-renewal, must be managed very carefully. Unfortunately, they often have the tendency to creep up on you unannounced, or bypass you completely as you run around managing other projects and putting out fires. Such tendencies cost the company real money rather than saved future money.

Proactive Renewal Management

There’s a big difference between auto-renewing to take work off an already overflowing plate, and auto-renewing to streamline your contracts management processes. The former is crisis-driven, while the latter is efficiency-driven. Generating notifications 30-60 days in advance allows time to review performance on the contract and check current options. Finding out on Monday that the renewal is up on Friday leads you down the path of “no news is good news,” and missed opportunities to reduce costs if the contract parameters have changed. Worse still, managing each contract as an individual renewal event limits the creation of a formal notification process for senior management if performance issues are discovered. “No news is good news,” means less headaches for everyone, but if that performance failure has compliance ramifications, an internal audit will most likely bring even bigger headaches.


Leveraging the advance notice to confirm that everything is going according to plan well before the renewal date arrives, opens up the possibility of simple renewal template instructions rather than having to revisit every step of the original contract creation process. With a checklist sign-off, there’s no scrambling for initial paperwork and supporting documentation, and if those responsible for signing-off on that checklist happen to procrastinate, there’s always the option of management escalation to get their attention.

Streamlined Contracts Management

Separating contract creation from contract renewal as two separate events only exacerbates the problem. A signed contract is too easily forgotten about and leads to the inevitable surprise factor when it comes up for renewal – so soon? Our comprehensive Contracts Management Software solution operates on one secure SharePoint portal with two separate sites for contract creation andcontract management. Using templates built on industry best practices, every element of the original contract is published over to the contract management site so that all renewal or expiration notifications can put in place when the contract is approved. If the contract has specific performance criteria, event-based alerts can also be set-up to automatically notify all relevant personnel if any performance failure is reported.

If you’re tired of using auto-renewal to maintain your sanity, request a free no obligation demonstration and let us show you how to leverage the full potential of proactive contract management.

Industries Served


Manage employee and teacher contracts, sponsorship deals, city and state regulations, and partnerships.


Manufacturing and Retail Industry

Manage supplier and vendor contracts, employee and staff contracts, distribution contracts, and facility leasing and ownership contracts.



Comply with HIPAA, HITECH, ICD 9, ICD 10, and FDR CFR regulations for contract management, and handle active directory contracts for your organization.


Financial Services and Banking

Comply with SEC, FDIC, FINRA, OCC, CFTC, and Federal Reserve regulations on contracts, handle employee contracts, and partnership deals.


Insurance and Employee Benefits

Create and manage employee contracts, improve organizational transparency, reduce risk factors, and mitigate lawsuits.


Energy and Utilities

Abide by local, regional, state and federal regulations, manage contractor information, develop third-party outsourced contracts, and handle facility agreements.



Comply with FAA, DOT, FMCSA, FRA and FTA regulations for contracts, outline contracts for drivers and vendors, and reduce potential risks.


Visit our resource library for industry best practices and how our Contract Management Software has helped numerous clients in your industry.


See a Contract Management Software Demo

Let us show you how our Contract Management Software will strengthen your compliance program.



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