According to a World Commerce & Contracting study, companies lose over 9% of their total annual turnover each year due to poor contract management. The percentage is even higher, up to 15%, for larger companies.

A few reasons why this happens:

• Around 40% of companies use 50+ SaaS tools, and 5% of companies use 250+ tools.
• Limited use of contract management software‍
• SaaS contracts get auto-renewed because companies do not have visibility over renewal dates.
• Contracts are difficult to understand or use.

A SaaS renewal management platform like Spendflo can resolve the problem by bringing all contracts to a centralized platform. Thus, you can see what’s up for renewal and you also get notifications 90-120 days before the renewal date. 

During the period leading up to the renewal date, you can run user sentiment surveys to understand if you should renew the contract, renegotiate based on usage data, or switch to a different SaaS tool. 

Apart from this, you can consider some of these SaaS renewal best practices to take charge of your contracts and rightsize spending. 

12 Best Practices for SaaS Renewals 

Seamless SaaS renewals require a comprehensive approach encompassing customer relationships, data-driven insights, and adaptable contract structures.

1. Designated owner for each SaaS tool

An absence of defined ownership can lead to ambiguity around SaaS tool utilization, renewals, and ROI assessment. Assign a designated owner who will be accountable for tracking tool usage, making decisions on renewals, and gauging the tool's value to the company.

2. Review of renewal clauses 

When the clauses in a SaaS contract are misunderstood or overlooked, a company can find itself bound to conditions that don't serve its best interests. This leads to unforeseen commitments or hefty penalties. 

Establishing a legal review process mitigates these risks. This review should assess the renewal terms, potential penalties, and exit strategies. 

3. Centralized renewal calendar

Instead of sifting through multiple emails, spreadsheets, or paper notes, use a renewal calendar to put everything in one place. This saves time and prevents potential financial losses. 

4. Stay on top of auto-renewing contracts

Companies are burdened with unexpected costs due to unmonitored auto-renewals or continuing services that are no longer beneficial. So, how can you maintain a clear overview of all your agreements? 

If you use a renewal management software like Spendflo, you gain a one-stop solution to centralize all your SaaS and non-SaaS contracts so you can view, assess, and manage them. You can set reminders for each renewal, check their relevance, and make informed decisions. 

5. Budget forecasting

Budget forecasting involves reviewing and anticipating upcoming SaaS renewal expenses. 

Planning these renewals allows companies to allocate funds and avoid financial surprises. 

6. Regular software audits 

A common issue companies face is unused or underutilized SaaS tools. To tackle this, regular software audits are essential. Companies can conduct these audits quarterly or biannually to understand which tools are beneficial. 

Tellingly, we found that 56% of companies don’t have a monthly cadence for SaaS spend review. Of them, 16% don’t have a pre-established cadence—they review as and when business leaders want to.

7. License consolidation

Companies can consolidate several licenses into a single bulk or enterprise agreement. This means fewer renewal dates to track, streamlined support, and cost savings due to volume discounts. 

This method reduces administrative overhead, provides a clearer picture of SaaS software usage, and enables better negotiations with vendors.

8. Feedback loop with teams    

Establish regular feedback mechanisms with various teams about the SaaS tools they use. Instead of relying on assumptions, get direct feedback. This hands-on approach offers clarity on tool utility and satisfaction.

Spendflo's Sentiment Hub enables you to: 

• Gauge user sentiment about SaaS tools with periodic surveys.
• Use accurate data to make renewal decisions.
• Measure the ROI of your SaaS investments.

9. Ensure visibility of all SaaS data

Adopt a centralized SaaS management platform that serves as a single source of truth and consolidate all software data. This helps in better budgeting and leads to informed renewal decisions.

10. Risk assessment for renewals

Companies should conduct a thorough risk assessment to understand and evaluate their dependencies on particular SaaS offerings. This ensures business continuity even if unforeseen challenges arise with the SaaS product.

11. Data security and compliance checks    

Before renewing any contract, assessing the SaaS tool’s adherence to the latest data protection protocols and compliance benchmarks. This safeguards company data and protects its reputation and trustworthiness.

12. Exit strategy evaluation    

Migrating away from SaaS tools due to data lock-ins can prove to be a challenge. 

Implement an exit strategy evaluation. Having a concrete exit plan makes transitions smoother and minimizes disruptions. 

This is where Spendflo's Assisted Buying comes into play. Our dedicated team of expert buyers helps you select the right SaaS tools using pricing benchmark data and industry experience.

Implementing SaaS renewal best practices is a journey of constant improvement that allows companies to handle renewals with confidence and drive. 

Post-renewal best practices

Once you've renewed your contract, adopting specific strategies to maintain a healthy, beneficial relationship with your vendor is crucial. 

These post-renewal best practices ensure that you get the most out of your partnership and pave the way for smoother interactions in the future. 

1. Cost-Benefit Evaluation

Review the ROI of the SaaS tool and stay vigilant for any changes in pricing after the renewal, especially unexpected fees that may have cropped up. 

Pinpointing areas where the costs and benefits don't align equips you with valuable insights for future negotiations.

2. Continuous vendor communication

After renewing, keep the lines of communication open with your vendor. Share feedback on how their service is performing. If there are problems, let them know. 

Stay in the loop about any new features or updates they might roll out. As your business changes, make sure they understand your unique needs so they can adjust their service for you. This helps both sides work better together.

SaaS renewal management with Spendflo 

Spendflo's unified solution offers businesses a seamless way to track, analyze, and renew their SaaS tools. You can manage all your renewals with custom notifications and plan for timely upgrades or downgrades ahead of time. 

Get assistance from our expert negotiators to get the best deals. 

Spendflo also integrates with your preferred apps such as Slack, G Suite, Okta, and Azure, simplifying SaaS buying for you and your teams.

Book a free savings analysis today to learn more! 

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