Various problems need to be addressed that contract, legal, and procurement professionals face when managing contracts.

Research reveals that the average contract failure rate is 10-15%.

And this failure is not because of contracts but how those contracts are managed. When you have thousands of contracts to manage, these 10% to 15% can result in a million-dollar revenue loss. Beyond dollars and cents, lost revenue can lead to lower profitability, underperforming stock, decreased market share, and less capital for investments, growth, and innovation. Do you also face the same situation? Are your contracts losing revenue? Let’s run a test check.

3 Warning Signs Your Contracts Are Leaving Money On The Table

1-Lack of Visibility

Are you wasting too much time searching for contracts? Do you struggle to maintain and track the latest version of your contracts?
Perhaps, No.

Contracts whose terms, conditions, commitments, obligations, and entitlements are not readily accessible are inherently difficult to monitor. Lack of contract visibility results in poor contract compliance. In order to fulfill contract compliance, various stakeholders (legal teams, sales teams, procurement teams, finance teams) have to be able to easily identify deviations, create, assign and track obligations, and monitor legal and regulatory changes in multiple regions.

Aavenir Tip: Summarize the most important details of a contract in one simple document that is easily accessible and understandable to all or opt for a cloud-based centralized contract repository to improve contract compliance with increased contract visibility.

2-Scattered Contracts

Is your contract management process manual? Do you struggle to scale the contract management strategy along with growth in the volume of contracts?
Perhaps, No.

Roughly 50%-60% of mid to large companies are tracking contracts manually, on a word document, or excel spreadsheet.

Using spreadsheets and other manual processes (tracking contracts via Word, Emails, PDF, etc) as your contract management tool isn’t effective, or even practical, especially because they can result in some major pitfalls like

• Expensive data entry errors
• Inefficient workflows that can’t scale
• Compliance and reputational risks

Aavenir Tip: Use ready-to-use contract management spreadsheet templates to ease your contract management. If you have more complex requirements, it is a must to opt for an AI-enabled contract management solution..

3-Missing on Key Dates and Milestones

Are you able to monitor contractual progress by keeping track of important dates and milestones, expirations and renewal dates? Are you fulfilling all your contractual obligations in due time?
Perhaps, No - again!

When you have a manual contract management process, it is prone to human error. In addition, the manual process does not support electronic storage of contracts which results in poor reporting and weak analytics. Hence, contract managers lack visibility into real-time status, at times fail to meet obligations and struggle to drive revenue out of those contracts. Also, failure to contract compliance i.e. a contractual breach can result in significant fines, poor publicity, and a lost relationship with a beneficial partner.

Aavenir Tip: Use contract management visual dashboards to track the status of contract stages, deadlines, negotiation lengths, activity reports, and other legal terms.

Next steps

You must improve your contract management process to break the cycle of revenue-losing contracts. Effective contract management not only reduces cycle times but also takes you faster from contract authoring to signature to execution. Embrace modern and intelligent AI-enabled CLM solutions! that help you seize ownership of your contracts to cease revenue loss.