Click, Renew, Overspend: 10 Uncomfortable Truths About Your Software Renewals

Software renewals are one of the most consistent and underestimated ways businesses lose money. 

Unlike new software purchases, which typically draw extra scrutiny, require more justification, and involve multiple stakeholders, renewals often pass under the radar without proper vetting. The tool is already live. The team’s already using it. It’s already budgeted. No time to even migrate to a new tool. So why rock the boat?

But with nearly 20 years in procurement under my belt, I can confidently say that renewals are where the real leakage happens. Think about it: the majority of procurement work is related to managing renewals and the average company handles around 200-600 of these contracts annually (depending on size).

Whether it’s a 7% uplift, a duplicative tool, or an underused license pool, your software renewal contracts tend to become missed opportunities to claw back savings and value for the business. Multiply that across dozens upon dozens of tools in your stack and the missed opportunities are abundant.

Software Renewals Need Rigor

You don’t need to scrutinize every software renewal, but you do need to approach them with the same discipline as new purchases. That rigor not only ensures you’re making cost-effective spend decisions that truly fit your team’s needs, but it also helps you prioritize which renewals warrant deeper analysis and negotiation effort in the first place.

• Renewals compound over time: What starts as a modest agreement often grows with added users, expanded features, or forgotten pilots that quietly roll into a nightmare line item.
• Renewals susceptible to autorenew: Many contracts auto-renew without notice or review. If no one’s tracking those windows, vendors win by default.
• Renewals are often owned by…who?: Procurement trusts that department heads will manage it. The business assumes procurement has it covered. Finance just wants it in budget. This creates a vacuum where accountability fades.
• Renewals don’t get properly benchmarked: Unlike net-new purchases, where competitive pricing is scrutinized, renewals tend to skip a reliable/thorough market check. Vendors use this to push price increases, repackage SKUs, and slip in restrictive terms unnoticed.

Most critically, renewals are happening every month, at scale, across every function. That frequency turns them from a one-off expense into a systemic vulnerability

10 Uncomfortable Truths About Your Software Renewals

As VP of Procurement at a procurement company, I have the unique opportunity to work directly with a wide range of teams from fast-scaling startups to established mid-market organizations. I lead tech stack analyses and help them strategize the new path forward so that procurement can generate a high return on investment.

Whether it’s a procurement team of one (the lone wolf, as I like to call them), a VP of Finance wearing the procurement hat, a CFO managing contracts with a lean team, or an FP&A manager trying to forecast a volatile software budget, I’ve sat with them all.

Across countless conversations, clear patterns (and uncomfortable truths) emerge that underline the recurring struggles teams face in handling software renewals and executing procurement well.

1. Lack of Timely Visibility Is Your Biggest Risk

Renewals sneak up not because teams are asleep at the wheel, but because the data lives everywhere and nowhere. Contracts are buried in inboxes, Slack threads, SharePoint folders, or locked in the minds of whoever signed them last (they might not even be at your company anymore). 

When there’s no single source of truth, renewals become a game of hide and seek with the budget on the line.

Missed notice windows (opt-out date) lead to unintended auto-renewals. Supplier uplifts go unchallenged. And tools stay live even after the business outgrows them.

2. Lack of Time Is Your Greatest Adversary

Even with perfect visibility, you need time to do something about it. And here’s the paradox: most teams are too busy to get ahead of renewals, which leads to rushed reviews, last-minute approvals, and zero leverage with vendors.

Tropic’s data shows that the average company who engages six months ahead of their renewal date can save up to 39%, compared to 14% savings when engaging 30 days before and 22% savings 60 days before.

Give yourself an at-bat to swing for savings by engaging stakeholders early; otherwise, it’s a missed margin opportunity.

Tip: Build a rolling renewal calendar and assign ownership. Create a rhythm where upcoming renewals are reviewed weekly, and anything due within 3-6 months (pending on how critical the tool is) has a clear plan of action and negotiation strategy.

3. ~75% of “Procurement Work” Is Chasing Context for Renewals

How many renewal cycles start with questions like:

• “Who owns this tool?”
• “What was the original scope?”
• “Do we even still use this?”

The reality is, teams burn the majority of their time on collecting context, backtracking through contracts, usage reports, Slack threads, and stakeholder memory. It’s unsustainable at scale.

And when context is missing, purchase decisions get made on gut feel, not facts and data. That’s a recipe for overpaying and underperformance.

4. Quoted Price ≠ Market Price

A supplier offering a 10% discount might feel like a win…until you find out others are getting 15%, 20%, or more for the same product and usage profile. 

Don’t let a done deal make you think you got a good deal.

The reality is, discount percentages are meaningless without a baseline. A 10% break on inflated pricing is still overpaying. And in the software market today, where pricing variability is extreme, that risk is only growing. 

In fact, we’ve analyzed deals where DocuSign’s pricing variability spans 111% (-48.8% at the 25th percentile to +62% at the 75% percentile). That’s wild.

Come renewal, vendors count on that inertia - and on your lack of external reference points - to push through uplifts, repackaged bundles, or reduced value under the guise of “standard” pricing.

5. The Contract You Signed Isn’t the Deal You’re Living

Over time, your actual usage may diverge from the contract you signed. Maybe headcount shrank. Maybe the team moved to a different tool. Maybe you added SKUs no one remembers approving.

This "contract drift" is where value leakage hides. You’re paying for the past, not the present.

More dangerously, it creates compliance risk. You may be out of scope, over-licensed, or under-covered—none of which will be caught without a deliberate audit.

Tip: Run a license-level usage audit before any renewal. Partner with the supplier or tool admin to pull data, then validate with stakeholders. Remove what’s not being used. Recalibrate the scope. You’ll almost always find savings, or at least, alignment.

6. Renewal Math Rewards Prioritization

Finance and procurement teams often rely on the Pareto principle, focusing on the top 20% of suppliers that drive 80% of costs. But in software renewals, the biggest dollar figures don’t always yield the biggest savings opportunities.

Large vendors can have rigid pricing and minimal flexibility. You might spend weeks chasing a 2% discount on a $1M contract - only to see marginal returns. Meanwhile, smaller, overlooked renewals may have the most negotiable terms and higher savings potential.

For example, which would you rather pick?

• Save 2% on a $1M deal = $20K savings
• Save 40% on a $100K deal = $40K savings

Prioritize based on impact, not just timeline.

And the latter likely takes far less time. The goal isn’t to take a deep dive for every renewal contract you have, but to prioritize and manage the right ones (and fast track the ones with low savings potential).

7. Your Inbox Is Not a System

When contracts live in Gmail, nobody owns them - and worse, nobody remembers them. Then an employee leaves, and their inbox goes with them. The next thing you know, a $60K contract auto-renews and no one knows why.

Email may be a great collaboration tool, but it’s not a great source of truth. You’d be surprised at how often teams treat email as such. 

8. Suppliers Are Constantly Changing Pricing, Packaging, and Features

It’s easy to assume a renewal is just a continuation of what you already have, but vendors treat it as a revenue event. That means changes to pricing models, feature packaging, and contract structure - all designed to maximize expansion.

We're seeing a rapid shift in how vendors price their offerings, especially in the wake of AI adoption. Traditional seat-based pricing is giving way to usage-based models, so costs are tied to API calls, credits, tokens, resolutions, or consumption hours. It provides great flexibility for buyers, yes, but it also creates massive forecasting complexity.

You may be asked to pay more for Bundled “AI features” your team may not need, renamed or restructured SKUs with less visibility, or forced migrations to new pricing tiers.

This unpredictability is becoming the norm, not the exception. Vendors are experimenting with AI-fueled value narratives and it’s on buyers to build guardrails into contracts, validate pricing logic, and design more flexible forecasting models to account for usage-based AI consumption. Without proactive controls, what starts as a promising tool can quickly spiral into an unpredictable cost center.

Tip: Approach every renewal like a net-new evaluation. Ask:

• Has the pricing model changed?
• Are usage caps, overages, or consumption fees newly introduced?
• Are there cheaper or more aligned alternatives in the market?

Then compare against competitors - especially AI-native tools that offer precision without the overhead. Don’t let legacy pricing structures carry forward unchecked.

9. If It Takes Hours to Do the Analysis, It Won’t Get Done at Scale

Most teams do want to be strategic, but they’re blocked by manual operations. When contract and supplier data is scattered across inboxes, PDFs, spreadsheets, and Slack messages, the process of reviewing even a single renewal becomes friction-heavy and manual.

And at scale? It breaks entirely.

If reviewing and researching one contract takes hours, it’s not going to happen across dozens of other vendors across your tech stack. Instead, decisions default to “just renew” (or minimal checks and balances) - not because it’s the right choice, but because no one had time to ask if it was. That’s how shelfware lingers and unnoticed uplifts and terms slide through. 

Tip: Centralize data fields (e.g. contract value, renewal type, owner, usage) in a single dashboard. Use AI-enabled tools to automatically flag anomalies like shelfware, unusual price increases, or missing benchmarking. Empower your team to act fast without sacrificing insight.

10. Procurement Should Match the Pace of the Business

Procurement tends to hold back the business when we make user experience and processes too complicated for internal stakeholders. 

• Intake forms are often overloaded with unnecessary questions, requiring long-form responses stakeholders don’t have time to answer. 
• Approval chains stretch across legal, finance, IT, and security, with manual handoffs that create delays.
• Due diligence needed before a renewal - finding contracts, pulling usage data, checking benchmarks - is often too fragmented to happen efficiently.

When the process becomes this burdensome, teams stop engaging. They buy off-cycle. They skip review steps. They go directly to suppliers or swipe a card to solve their problem - and introduce shadow IT, unmanaged spend, and compliance risk in the process.

When procurement is cumbersome to do, they disengage. But when procurement is fast, responsive, and proactively embedded in their workflow, they lean in.

Renewals Don't Have to be a Pain in the SaaS

Most teams don’t realize how much value is lost in renewals until it’s too late. Most of the time, it’s actually not due to carelessness; it’s the result of limited resources, siloed data, and a process designed for speed over scrutiny. 

Vendors know this. And when finding terms, usage data, and benchmarks feels like too much manual work, sloppy approvals win.

But each of these uncomfortable truths reveals a better way forward.

With the right structure in place, renewals can shift from tedious line items to high-leverage opportunities. That’s exactly where tools like Purchase Prep come in - to make it easier to centralize information, surface benchmarks, and prioritize where to focus, so teams can act quickly and confidently.