In the dynamic landscape of contractual agreements, understanding and effectively managing auto-renewing contracts is paramount. As organizations navigate a myriad of subscriptions and services, the potential for overlooked renewals and unexpected financial commitments is large. This guide will walk you through the process of documenting auto-renewal terms in your contracts. Additionally, we'll explore how to configure renewal reminders for auto-renewing contracts, ensuring you have time to prepare and make informed decisions well in advance of the cancellation deadline.
How to add the auto-renewal terms to your contract
The auto-renewal terms can be captured using 3 contract fields placed under the Auto-Renewal group:
- Auto-Renewal: This field indicates whether the contract has an auto-renewal clause. If the value is "Yes," it means that the contract will automatically renew at the end of the initial term unless specific action is taken. If the value is "No," it indicates that the contract does not have an auto-renewal provision, and it will not renew automatically.
- Cancellation Notice Period (days): This field specifies the number of days in advance that the customer needs to send a cancellation notice to the vendor if they do not wish to renew the contract. This notice period is crucial for customers to understand how much time they have to inform the vendor about their intention to cancel or not renew the contract.
- Cancellation Deadline: Represents the final date by which the customer can send a cancellation notice to the vendor and still prevent the contract from auto-renewing. After this date, the contract will likely renew as per the terms specified in the contract.
The first 2 fields can be either entered manually or be automatically parsed with Torii magic auto-fill. The “Cancellation Deadline” is a calculated field derived from the contract end date and the cancellation notice period. Therefor it cannot be manually edited.
How to identify a contract with an auto-renewal clause
In the Renewal Calendar, an Auto-Renewal icon helps identify at a glance auto-renewal contracts. In addition, the Auto-Renewal field can be used as a filter criteria to quickly find all contracts with an auto-renewal clause.
How to create renewal notifications for auto-renewing contracts
When configuring renewal notifications we recommend creating 2 different notifications - one for contracts which are not auto-renewing and another one for auto-renewing contracts. Here are step by step instructions.
What if I already have auto-renewal custom fields?
If you already use your own custom fields to document auto-renewals, we strongly recommend you migrate and use Torii built in fields. Read more about why to migrate and a step by step guide in this article.