How To Avoid Missing A Contract Notice Period
One mistake that many of us make is to not to give the correct notice on a supplier contract. This can often result in either a contract automatically rolling over or being put on expensive out-of-contract rates.
The cost of forgetting to give notice varies depending on the value of the contract, the supplier and the type of goods or service that its for. In some cases, it might not be for a lot of money, however cumulatively these costs can add up. In other cases, it might be expensive, for example a lease that rolls over for another year for redundant equipment. In some countries a lease can legally roll-over for the duration of the original contract if the correct notice period is not given. Fortunately not in the UK. It’s important to remember that every £1 wasted is equivalent to £10 of revenue, assuming a sales margin of 10%.
As well as the costs going up, not giving notice may result in having to continue to work with a supplier that is ok, when ideally the contract would have ended and a new supplier awarded the business who would offer a better service.
Not giving notice on a contract can happen for a variety of reasons, including the fact that no-one read the small print when the contract was signed, being too busy or just forgetting about it. Unfortunately, the reasons are largely irrelevant as the contract terms are enforceable and it will likely cost money to get out of an automatically rolled over contract.
The effects of Working From Home over the last 15 months have meant that many contracted goods and services should to be thoroughly reviewed before negotiating a new contract as the requirements may well have changed and there is a good opportunity to reduce consumption and waste and save money. It’s important to remember that it’s easier and cheaper to increase a contract value than it is to try and reduce a contract value midway through a contract.
Historically supplier contracts have been filed away in desk drawers and more recently filed way in shared cloud drives. This is fine, if they can easily be accessed and more importantly there’s an accurate record of exactly when notice periods need to be given by. The reality is that unless spreadsheets and documents checked regularly notice periods will still be missed.
A solution to missing contract notice periods is to use a cloud-based Contract Management software. It’s a contract repository that stores all the contract details and documentation in one easily accessible and collaborative place. In addition, it automatically sends out reminders of contract notice periods so there’s no excuse for ever missing one again.
oboloo offers a simple and cost-effective Contract Management software that has been designed specifically for SMEs. oboloo is an intuitive self-service solution that also incorporates sourcing, supplier and savings management to enable companies to be supplier smart. To learn more please visit www.oboloo.com
Additional resources
These external articles contain useful information on Contract Management: