Contract renewals and expiring agreements

A commercial supply contract has one date on it that costs money to forget. Everything on this page follows from finding that date and acting before it passes.

What a holdover rate is and why it persists

When a fixed term ends without a new agreement, supply continues — you are never cut off — but the pricing reverts to the supplier's default, variable, month-to-month rate. It is the most expensive product they sell, it can change every month, and it does not expire. Businesses sit on them for years.

It persists because nothing announces it. The lights stay on, the bill arrives, autopay pays it, and the increase is spread across months rather than landing as one alarming number. It surfaces when someone finally compares this year's spend to last year's, or when a broker reads the bill.

Renewing on your own timing

The mechanism that puts you in control is the forward-start contract. Suppliers will price a contract today that begins on a future date — typically the day your current term ends. So the sequence looks like this:

• Find your end date, three to six months out.
• Check the notice window in your existing contract, particularly for evergreen clauses.
• Take your usage to market and collect comparable offers for a forward start.
• Sign when the pricing is acceptable, not when the deadline arrives.
• The new contract begins the day the old one ends, with no gap and no holdover month.

The renewal letter is a starting point

Your supplier will send a renewal offer as the term approaches. It is priced with the knowledge that a large fraction of customers accept it without comparison — that is not cynicism, it is how the offer is modelled.

Taking it to market costs nothing and produces one of two outcomes: a better offer, or confirmation that your supplier's number was genuinely competitive. Both are worth having, and the second is worth more than an assumption.

Evergreen and auto-renewal clauses

Some contracts extend automatically unless you give notice inside a window — often 30 to 90 days before expiry. Depending on the wording, the extension can be month to month at a variable rate, or another full fixed term at a rate you did not negotiate.

Find out whether your contract has one now rather than in the window. It changes the calendar for everything else on this page.

Multiple contracts, multiple dates

A business with several locations acquired at different times usually has several contracts with different suppliers and different end dates. Each one is a separate opportunity to roll onto a holdover rate, and no single person is usually tracking all of them.

Bringing them onto aligned end dates takes a cycle or two to arrange and converts a scattered series of surprises into one planned annual decision — with the whole portfolio's volume as leverage when it comes. How multi-site accounts work.

What we do at renewal

• Read your current contract: end date, rate type, termination terms, evergreen language.
• Pull your usage history so suppliers price against your real load rather than an estimate.
• Take the account to market on one day so the offers are genuinely comparable.
• Compare your supplier's renewal offer against them honestly, including when it wins.
• Handle the paperwork and confirm the start date lines up with your expiry.