Auto-renewal

Auto-renewal (sometimes called an evergreen clause) is a contract term that renews an agreement automatically for another period unless you give notice to cancel before a set deadline. It is the default on most SaaS subscriptions.

The risk is quiet: a tool you no longer use can renew for another year simply because nobody actioned the cancellation in time. Tracking which contracts auto-renew, and when their notice windows close, is the main defence.

A team of 12 pays £40 per seat per month for a tool nobody has opened since a project ended in the spring. That is £480 a month, £5,760 on the annual term. The renewal is in March, the clause requires 60 days notice, and the decision therefore had to be made in January. Nobody made it, so the contract renewed and the £5,760 is now owed for a year that everyone involved had already decided against.

Three things have to be true at once for that to happen, which is also why it is preventable. Auto-renewal has to be switched on, there has to be a notice period that closes before the renewal, and nobody has to be watching the earlier of the two dates. The first two are the vendor's terms and are rarely negotiable. The third is entirely yours.

Auto-renew is an explicit flag on each record rather than an assumption, because the two cases behave differently and need to. With it on, a renewal date that has passed rolls forward by the billing cycle to the next real one, so an auto-renewing tool never drops off the dashboard or out of the reminder sweep simply because a date went by. With it off, a passed renewal date stays put and the record reads as overdue, which is the correct signal for a contract that has actually lapsed.

That distinction is what makes the auto-renew flag worth setting honestly on every row. It is the difference between a register that quietly loses the contracts still charging you and one that keeps them in front of you until somebody decides.