“And we should know,” explains Angelique Schouten, co-founder of Cloudtract. “We forgot to cancel an IT contract and wasted 40.000 euro, paying for a software license we didn’t need anymore. A market study revealed the absence of an easy-to-use solution to store and manage contracts for free.”
Contract management neglected by SMEs
Their research found that most entrepreneurs and SMEs focus on running their day-to-day business and do not, or to a much lesser extent, pay attention to managing their contract administration.
“When we researched contract management behaviour at companies, we concluded that contracts are usually kept in a folder in the corner of an office or at a secretary’s desk. Sometimes a simple spreadsheet or calendar program is used. Especially facility and maintenance contracts lack attention. These contracts regularly do not make money, they just cost money and consequently are not top of mind,” according to Schouten.
The founders of Cloudtract experienced first-hand what it is like to forget to cancel a contract or even try finding all of the contracts. When Schouten started working at an insurance company it took her two months to gather all the contracts that the marketing department signed during the previous years.
“It is shocking to see that we did not know which contracts the marketers had signed and that the IT department had to pay for an unused software license of 40.000 euro,” says Schouten.
Absence of a simple and affordable solution
Both occurrences at the insurance company led to a market study which showed there were two categories of contract management solutions according to Schouten: “Contract management software that is either part of an expensive ERP-software package or an over-engineered pay-per-user license model. Not the solution we were looking for as we only needed a place to store contracts safely and receive an alert.”
Contract management at SMEs often results in unwanted renewed contracts, double contracts or unfavourable conditions. It’s a problem that Cloudtract wants to tackle head-on with its free online platform that makes it easy to securely store contracts and set alerts.
While the ultimate goal of Cloudtract is to offer this solution to businesses and consumers as well, the company has launched its beta version for companies only. It is available in English and more languages will follow shortly.