Neglecting your contract renewal process can cost you money, and a lot of it. By critically looking at your contracts, rather than automatically renewing them, you can save time and money in the long term.
In the bustle of running a business on a day to day basis, often contracts are rolled over without giving much thought as to whether the supplier is actually performing and whether the contact terms, which may have been negotiated several years ago, are still relevant.
Sometimes, the relative bargaining positions of the parties may have changed over the life of the contract, allowing you to be in a better position at renewal, than at its commencement, to require better commercial terms.
Contract renewal is usually a good point in the life cycle of a contract to address matters such as:
- Poor performance by your supplier.
- Any mismanagement of the contract.
- Pricing and price increase clauses.
- Exclusivity arrangements.
- Review of KPIs.
Contract renewal is also a great opportunity to ask yourself:
- Has my supplier been performing the contract to my expectations?
- Am I happy with the price?
- Am I happy with the quality of the merchandise that is being supplied?
- Should I look at alternative suppliers?
If you are generally happy but there have been issues under the contract you may wish to just amend a couple of clauses to ensure a smoother relationship for the renewal term.
Contract renewal can also be a good point in time to consider whether the contract should be renewed with the incumbent supplier or should you seek alternative quotes or put the arrangement out to tender?
Fortunately, executing an efficient and effective contract renewal process doesn’t take much time or effort. In fact, simplification of the process is a task easily performed by Contract Management Software. Also, your trusted legal advisers can monitor expiry dates and prompt you with matters to consider at renewal time.
For more information on streamlining the contract renewal process, feel free to contact Gladwin Legal (ph: 1300 033 934 or email: ).