Giving Grace (Periods)

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With Thanksgiving right around the corner, it’s the perfect time to talk about grace!

As in those tricky grace periods that can occur in between contract renewals.

Because ideally, a renewal contract should start the day after the current one ends.

But in the real world, customers renew later than expected, earlier than expected, for less or more than expected, or not at all.

I’ve seen all types of scenarios set up to address this:
👉 grace periods added to the end of a contract that are removed when/if the renewal is signed on time
👉 different grace periods for contracts that are expanding (more $) vs contracting (less $)
👉 certain tier customers getting different grace periods than others

While these "rules" can be accommodated, if they aren’t applied consistently and defined early on, your ARR accuracy can take a major hit and be difficult to explain to others!

This is why I always stress the importance of building clear ARR documentation with a particular focus on exceptions beyond simple cases like on-time renewals for the same or higher amount.

If you’re not sure where to start, here are 10 questions to cover the most common exceptions.

(and Happy Thanksgiving to all our American customers and friends! 🦃 🦃 🦃 )