3 Ways Contract Analysis Can Help You Reclaim Lost Revenue

March 30, 2020

4 minute read



So much time and care go into striking new deals and developing new client relationships. Tremendous effort is put into negotiating the most favorable terms for your company in every agreement. After working so hard to achieve that success, it would be a shame to see revenue lost because of poor contract management. And yet, it happens.

According to research by the independent International Association for Contract and Commercial Management, companies could earn roughly 9% more revenue each year if they were more diligent in managing their contracts.1

Consider how it would feel to improve contract management and unearth that extra nine percent of revenue. Consider its impact on investment, efficiency, and the morale of a team better equipped to understand and quickly execute on contracts.

An automated Contract Intelligence solution can help you find savings, reduce windfalls, and streamline the effort required to deliver on all contract terms. Read on to learn how.

Revenue Recovery Strategy #1: Find Lost or Neglected Contracts

The challenge for business leaders seeking to drive performance is that many—particularly banks and insurance organizations—don’t have easy access to all their contracts.

Institutions have repositories filled with agreements in unstructured formats that have been collecting dust for decades. More and more arrive every day, and many—if not all—of these agreements are not searchable. The contracts themselves may be hard to locate, and the terms within them are not easy to extract—making it challenging to easily understand what has been promised.

Let’s say you’re an IT director working with a vendor on modernizing their policy admin system. How can you hold that vendor accountable for all the project deliverables without full transparency into the agreement that governs the relationship? Missed deadlines, ballooning costs, and unfulfilled expectations are a steep price to pay for this lack of visibility.

Tip: To reduce revenue risk from unstructured data, implement an automated Contract Intelligence process that identifies all contracts and the important terms, clauses, and values within them. Reclaim lost revenue by surfacing deliverables and deadlines.

Revenue Recovery Strategy #2: Identify Contract Renewal Dates & Terms

Revenue that is lost when a contract expires and is not renewed due to inattention is an obvious contributor to lost revenue.

But what many managers don’t see is that automatic agreement renewal, while helpful, does not guarantee revenue will be maximized. If contracts roll-over without any analysis or oversight, you lose the opportunity to re-evaluate clauses, optimize language, and negotiate better terms before signing off on the new deal.

In particular, automatic renewals rob you of the chance to ask for lower prices for services performed. In some cases, review of contracts approaching expiration may reveal that some services have been rendered obsolete over the life of the contract.

Being able to see terms in all contracts helps put the control of contract pricing back in your hands. Analysis of all agreements can ensure the most current pricing model is being applied and consistently maintained across all product lines. Best of all, it helps you avoid losing revenue because of underpricing or unearned discounts.

Tip: Use Contract Intelligence to gather data and improve terms and conditions to drive more value from your vendors and partners. Identify non-standard terms or clauses in contracts—especially those related to indemnity or termination—and optimize them to align with the rest of your agreements.

Revenue Recovery Strategy #3: Reduce Unstructured Data Risk

Research shows that the average contract failure rate is 10-15%2. For insurers and banks who have thousands or millions of contracts, that could mean billions in lost revenue.

This high level of contract failure may have become a painful norm for many leaders. And while some contract failure is inevitable, the rate can be reduced by simply identifying risks hidden in termination or performance clauses within contracts and addressing them before they lead to failure.

Even if contracts don’t fail, the “unknowns” lurking in agreements reduce your control over your relationships with everyone from partners to vendors to consumers. Contracts are supposed to help govern relationships and bring clarity around expectations and deliverables. They should make decision-making simpler, faster, and better. But when the available contract data is insufficient—or doesn’t tell the whole story—you can find doubt creeping in at the moment you’re faced with making an important call.

Tip: Take back control of your most important relationships and minimize contract failure rates. A robust Contract Intelligence solution can find, clean, and standardize data in your agreements—providing full contract transparency, extracting important terms, and analyzing risk.

The Final Verdict

The right Contract Intelligence solution can dramatically reduce revenue losses from poorly managed contracts. An automated process reduces risk and presents opportunities to optimize terms and conditions in all contracts. With that kind of control, you can manage not just agreements, but your most important relationships with vendors, partners, and clients. Most importantly, you can reclaim lost revenue—before your competitors do. Read about the pros/cons of 3 different Contract Intelligence solutions, so you can choose wisely.


1Lexology: Basics of Contract Management: Preventing Revenue Loss
2IACCM:Why contracts fail

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