7 SaaS Contract Best Practices you must follow in 2023

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min read time
March 30, 2023
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Do you ever feel like wrangling a herd of wild elephants when it comes to SaaS contracts? Do you find it unpleasant to navigate through the complex details of SLAs, legal responsibilities, and renewal terms?

You're not alone!  

Tracking all the various supplier contracts, services, and policies is difficult. And at the same time can be stressful, time-consuming, and downright annoying. But don't worry; we're here to assist you in effectively managing SaaS contracts.

It is vital to have a streamlined process for handling SaaS contracts in 2023. You don't want to be caught off guard by renewal dates or be blind about SLAs and other sensitive clauses.

By adhering to the SaaS contract best practices discussed in this article, you can enhance your contract management process. From discarding spreadsheet-based tracking systems to consolidating your contracts in one place, we have covered all aspects.

So let’s get started.

SaaS Contract best practices you must know

There's no need to reinvent the wheel regarding SaaS contract management. Embracing best practices will assist you in avoiding common mistakes and speeding up your business operations.

Using tested and proven SaaS contract management practices can help your business keep SaaS contracts secure and stay ahead of renewals, leading to potential cost savings.

So let us look at the seven best practices of saas contract management.

Get Rid Of Spreadsheet-Based Tracking

Many businesses use spreadsheets to track their SaaS contracts. However, using Spreadsheets for managing SaaS contracts can be time-consuming, error-prone, and inefficient. Spreadsheets can rapidly become redundant, and keeping track of various contracts, SaaS renewal dates, and other essential facts can be challenging.

Furthermore, spreadsheets are often insecure, and unauthorized people can easily access sensitive data. To avoid these issues, it is best to employ contract management software to automate the tracking of the contracts and management of the tasks.

A SaaS contract management system can organize your contracts in one location, making tracking and managing them more accessible.

Check out this customer success story of how Aira got rid of spreadsheets.

Stay Ahead Of Contract Renewals Using Workflows

You must manage SaaS renewals to minimize service interruptions or unexpected costs. Utilizing automated workflows that initiates 90 days before the renewal date can help speed up the renewal process and guarantee that all required steps are completed before the renewal deadline.

SaaS contract best practice to stay ahead of renewals

This can help you prepare for discussions and guarantee that you have enough time to analyze contracts and app usage and renew subscriptions on time. Workflows can also improve communication and coordination between the numerous teams participating in the renewal process.

An image of CloudEagle renewal workflow

CloudEagle’s contract renewals begin 90 days in advance, giving ample time to prepare a SaaS negotiation plan based on app usage. The workflow will escalate the task to various stakeholders within your team until one of them acts on it.

Renewal reminders will stop only after the contract is renewed; they act more like renewal guidance than a renewal alert.

Check out this interesting customer story of how Falkonry streamlined SaaS renewals using CloudEagle.

Clearly Define The SLAs And Liabilities

Service Level Agreements (SLAs) are contractual agreements describing the service level a vendor must give a customer. SLAs often include metrics that quantify the service's quality and availability, such as uptime, turnaround time, and resolution time.

As a result, they are an integral part of every SaaS contract, as they specify the service delivery and support obligations. SLAs and all associated liabilities, including penalties for failure to achieve SLAs, must be clearly defined.

This can help avoid misunderstandings, liability issues, and unforeseen costs and guarantee that all parties understand their roles and expectations.

Centralize Your SaaS Contracts

Managing SaaS contracts from several vendors can be challenging, especially if the contracts are maintained in decentralized locations like shared folders or inboxes.

By centralizing your contracts using contract management software, you can streamline your contract management processes while keeping track of all your SaaS contracts in one location.

This can also help ensure that all contracts are up to date and that no key elements, such as renewal dates, billing details, and SLAs, are missing.

An image of centralized SaaS contracts which is a SaaS contract best practice

This can assist you in managing many contracts more efficiently and effectively, lowering the chance of confusion and missing deadlines.

Furthermore, centralizing contracts allow teams to function more effectively by allowing many stakeholders to access the same contract simultaneously, collaborate on modifications, examine conditions, and track deadlines.

An image showing contract information

Also, it can assist in avoiding any extra charges or service outages. Centralizing SaaS contracts also help in compliance by making tracking and managing compliance easier.

This includes monitoring service level agreements (SLAs), checking vendor compliance with industry standards, and guaranteeing data security.

Track App Usage For Better SaaS Contract Renegotiations

Tracking your SaaS application utilization can provide significant insights into how you're employing the service and assist you in identifying areas where you may be overpaying for or underutilizing certain features.

This data can then be utilized for negotiating SaaS contracts at better pricing or terms with vendors during SaaS negotiations.

You can negotiate with the vendor effectively during renewals if you clearly understand how your employees use the apps.

Tracking app usage can also help businesses prepare for future software needs and avoid overpaying for underutilized applications. This technique can assist businesses in optimizing their budget on SaaS apps and increase their savings.  

Use a SaaS Contract Management Software

Several aspects of managing SaaS contracts can be automated with contract management software, saving you time and effort.

A comprehensive SaaS contract management software like CloudEagle has features such as automated renewal notifications, contract tracking, metadata extraction, dynamic filters, and centralized contract storage.

This can help you stay organized, limit the chance of errors or omissions, and guarantee that contracts are renewed on schedule.

An image of saved documents in CloudEagle dashboard

A software solution can also assist you in tracking and monitoring usage and payment statistics, giving you vital insights into how you utilize your subscriptions and suggesting areas where you can improve or combine your services.

Using contract management software, you can successfully manage your SaaS contracts in one place, be proactive about renewals, avoid losing your contracts, and decrease the risk of unexpected charges and service disruptions.

Be Proactive About Overages And Termination Policies

It's critical to be proactive about overages and termination procedures mentioned in your SaaS contracts to minimize unexpected charges and service disruptions.

Overages can occur when you surpass the vendor's use limits or thresholds, leading to extra charges. You may minimize overages and excessive expenditures by frequently monitoring your consumption and staying within your limits.

Furthermore, businesses should check their termination policies regularly to verify that they are in accordance with the terms of their contracts. This can assist you in avoiding penalties or legal issues while transitioning to a new service provider or solution.

Being proactive regarding overages and termination policies helps businesses avoid unexpected charges, ensuring that they are not violating their contracts, and can also help negotiate SaaS contracts at better pricing and terms with vendors when renewing contracts.


Managing SaaS contracts is essential to keep them safe, be updated on renewals, and verify vendor policies from time to time to prevent needless expenses.

We listed the SaaS contract best practices to show you how to streamline your SaaS contract management process.

Using these practices, whether centralizing your contracts, automating workflows, or tracking app usage, can help you optimize your SaaS stack and reduce unexpected expenditures.

And what better software to accomplish these contract management goals than using CloudEagle?

Cloudeagle can assist businesses in implementing the SaaS contract best practices to streamline software contract management in various ways.

An image of CloudEagle's dashboard

It is a comprehensive cloud-based contract management software that provides a wide range of features to assist organizations in more efficiently managing their contracts.

You can use Cloudeagle to automate contract management operations, simplify SaaS renewal management and termination policies, and measure usage for negotiating saas contracts at better rates and terms with providers.

So why wait? Try Cloudeagle today to take the first step toward seamless SaaS contract negotiation and management!

Frequently asked questions

1. How do you manage SaaS contracts?

Most businesses use spreadsheets to keep track of SaaS contracts and often miss out on SaaS renewals and lose the contracts. To manage SaaS contracts, businesses must use contract management software like CloudEagle to stay on top of renewals.

2. What are the consequences of failing to follow SaaS contract best practices?

Failure to comply with SaaS contract best practices can lead to unexpected charges, service interruptions, compliance issues, legal disputes, and vendor relationship damage. It can also result in ineffective contract management processes, wasted time and resources, and missed opportunities to optimize software usage and costs.

3. How frequently should SaaS contracts be reviewed?

Contracts for SaaS should be reviewed regularly, preferably every six to twelve months. This guarantees that the contract is current and meets your company's needs. It also enables you to identify areas where you may be overpaying for services or underusing features.

Written by
Anju Mary Peter
SaaS Buyer, CloudEagle
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