Where nine per cent of your revenue goes

Contract value rarely leaks in a single expensive event. It leaks quietly, through renewal dates nobody owns.

Problems, in order · Part of Outsourced General Counsel

The figure most often cited for value lost through poor contract management is around nine per cent of annual revenue. Whether the number is eight or eleven in any given business is beside the point. What matters is that almost none of it is visible in the management accounts, because leakage does not arrive as a loss. It arrives as an uplift you did not negotiate, a discount you forgot to claim, or a term that rolled for another three years while everyone was busy.

In founder-led businesses the mechanism is specific. Contracts are signed by whoever ran the deal. They are stored wherever that person stores things. Nobody owns the estate as a whole, so nobody is watching the dates. The result is not carelessness — it is an absence of function.

A distribution agreement worth £480,000 a year contains a ninety-day notice window and an indexation clause capped at five per cent. Miss the window and the uplift applies automatically. That is £24,000 in the first year, and it compounds into the base for every year that follows. The cost of avoiding it was one diary entry and one letter.

Ownership looks like one register. Every counterparty, value, renewal, break and review date in it. A named owner for each date, and a flag that fires before the window closes rather than after. Then somebody whose job it is to act on the flag — draft the notice, open the renegotiation, take the meeting.

That last part is where most contract software stops and where a General Counsel function starts. A dashboard tells you a deadline is coming. It does not write the letter.