The Hidden Value Already in Your Contracts

Executive Summary

Procurement teams have long struggled with indirect spend management—the sprawling, fragmented contracts that fall outside strategic sourcing processes. Our recent executive briefing with Art of Procurement, "Understanding Indirect Contract Renewals in the Age of AI," examines how AI is transforming procurement's ability to manage this long tail of spend.

But here's what we've learned since publication: the biggest opportunity isn't waiting until renewal—it's claiming the value you've already negotiated.

Organizations systematically leave 10-20% of contract value on the table through unclaimed rebates, missed volume discounts, unenforced SLA credits, and overlooked payment terms. These aren't negotiation failures; they're enforcement failures. Your contracts already entitle you to this value. You're just not claiming it.

The Core Problem: Contracts Leak Money

The Art of Procurement whitepaper identifies six critical signs of under-managed indirect spend:

Renewals occur without procurement involvement
Stakeholder-initiated purchases bypass formal processes
Small agreements renew on autopilot
Contracts exist outside procurement systems—or don't exist at all
Teams lack bandwidth for consistent review
Invoices arrive before contracts are even executed

These symptoms reveal a deeper issue: lack of visibility leads to lost value at every stage of the contract lifecycle.

But the financial impact begins long before renewal. Every month you operate under existing contracts, you're likely missing value you're contractually entitled to claim:

Common Sources of Unclaimed Value

Volume Rebates

Annual spend thresholds trigger 3-5% rebates
Quarterly volume commitments earn tiered discounts
Multi-year cumulative spend unlocks retroactive credits
Reality: These go unclaimed because no one is monitoring thresholds against actual spend

SLA Credits

Uptime guarantees (99.5%, 99.9%) trigger automatic credits when missed
Response time violations earn percentage-based refunds
Performance benchmarks tied to financial remedies
Reality: Vendors don't self-report failures; customers must identify and claim credits

Payment Discounts

2/10 Net 30 terms offer 2% discount if paid within 10 days
Early payment discounts range from 1-5% depending on terms
Volume-based payment terms improve with consolidated spend
Reality: Decentralized AP processes miss discount windows

Volume Tier Pricing

Unit costs decrease at volume thresholds (500 units, 1,000 units, 5,000 units)
Aggregated spend across departments qualifies for lower tiers
Multi-location contracts offer enterprise-wide volume benefits
Reality: Fragmented purchasing means departments pay higher per-unit costs

True-Up Credits

Over-purchased seats/licenses generate credits at true-up
Unused capacity triggers refunds or forward credits
Minimum commitments vs. actual usage reconciliation
Reality: True-ups happen once annually; opportunities compound when missed

Why Traditional Approaches Fail (Even With Good Systems)

The whitepaper observes: "Enterprise procurement systems were never designed to scale down to the hundreds or thousands of smaller agreements embedded deep within an organization."

Even organizations with mature CLM platforms struggle because:

Systems Track Contracts, Not Contractual Rights

Your CLM knows when a contract renews
It doesn't know when you've hit a rebate threshold
It can't match invoices to SLA commitments
It won't alert you to payment discount opportunities

Procurement Lacks Transaction-Level Visibility

Contracts live in one system (Ariba, Coupa, CLM)
Invoices flow through another (NetSuite, SAP, Workday)
No automated connection between contractual rights and actual performance
Finance sees transactions; procurement sees contracts; no one sees the gap

Volume Makes Manual Monitoring Impossible

200+ indirect contracts × 5 potential value clauses each = 1,000+ things to track
Each clause has different thresholds, calculation methods, and claim procedures
Procurement teams of 5-10 people can't manually monitor at this scale
Result: High-value strategic contracts get attention; everything else auto-renews with no enforcement

The Capacity Problem

As Divyabh Mishra, AllCaps CEO, noted in the whitepaper: "Procurement teams simply don't have the time. The idea is to give every contract—whether big or small—the same level of treatment."

This isn't a systems problem or a skills problem. It's a capacity problem that requires automation to solve.

The AI Opportunity: From Visibility to Value Capture

The whitepaper correctly identifies AI's role in bringing visibility to unmanaged spend. But visibility is just the beginning. The real transformation happens when AI moves from analysis to action—from identifying contracts to claiming the value within them.

Three Stages of AI-Enabled Value Capture

Stage 1: Contract Intelligence (What the Whitepaper Addresses)

Identify all value-claiming clauses across contract portfolio
Extract thresholds, calculation formulas, claim procedures
Map contractual rights to operational requirements
Create visibility into previously unmanaged agreements

Stage 2: Transaction Matching (The Missing Link)

Integrate contract terms with actual spend data
Calculate amounts owed based on real performance vs. thresholds
Generate claim-ready documentation with supporting evidence
Alert teams to approaching thresholds before opportunities expire

Stage 3: Claims as a Service (The AllCaps Model)

Automate claim letter generation with contract references
Manage vendor submission and response tracking
Handle disputes and payment reconciliation
Operate on contingency: you only pay when value is recovered

This three-stage model transforms AI from a diagnostic tool into a revenue generator.

Real-World Impact: What Gets Uncovered

Through pilots with universities, healthcare systems, and local governments, we consistently find:

$680,000 Overpayment Example

Fortune 500 manufacturer overpaid 3M by $680K over 18 months
Contract included volume-based pricing tiers
Purchasing was decentralized; no one aggregated spend to calculate tier
3M accepted calculation and issued credit—no dispute
This wasn't fraud. It was a failure to enforce existing contract terms.

Annual Rebate Left Unclaimed

School district spent $541,000 with facilities vendor
Contract: 5% rebate at $500K annual spend threshold
Amount owed: $27,052.50
Deadline: 30 days after year-end
Why unclaimed? No one was monitoring cumulative spend against threshold

SLA Credits Never Captured

IT services contract guaranteed 99.5% uptime with 10% monthly fee credits for failures
Vendor missed SLA in 3 of 12 months (99.1%, 98.8%, 99.3%)
Calculated credits owed: $18,900
Why unclaimed? IT team didn't track uptime; vendor didn't self-report

Payment Discounts Systematically Missed

AP processed invoices on Net 30 cycle (21-day average payment time)
Contract offered 2% discount if paid within 10 days
Annual spend: $420,000
Missed discount value: $8,400
Why missed? AP workflow optimized for Net 30; no flag for early payment benefit

The pattern is clear: these aren't edge cases. They're systemic enforcement gaps.

Rethinking Procurement's Operating Model

The whitepaper calls for organizations to "treat indirect renewals as a critical component of their value proposition." We agree—and we'd go further.

The new procurement operating model must address two parallel challenges:

Challenge 1: Renewals (The Whitepaper's Focus)

Prevent auto-renewals without review
Negotiate better terms at renewal based on benchmarks
Secure rights like termination for convenience, SLA commitments, price caps
Reduce risk through improved contract structure

Challenge 2: Enforcement (AllCaps' Focus)

Identify all value-claiming clauses in existing contracts
Monitor actual performance against contractual thresholds
Calculate amounts owed with supporting documentation
Submit claims and track payment receipt
Optimize behavior to maximize value capture (e.g., consolidate purchases to hit volume tiers)

Most organizations focus exclusively on Challenge 1, assuming that better negotiation at renewal is the primary value lever. But Challenge 2 often delivers higher ROI with less effort—you're claiming value you've already negotiated, not fighting for new concessions.

The Integrated Approach

The most sophisticated procurement teams are now combining both:

12-18 Months Before Renewal:

Audit existing contract for unclaimed value
Enforce rebates, discounts, credits through current term
Document vendor performance (SLA compliance, payment history)
Build claim data as negotiation leverage

At Renewal:

Cite unclaimed value as proof of vendor non-performance
Use payment history to negotiate better terms
Demand improved SLA commitments with stronger remedies
Secure volume commitment flexibility based on actual usage patterns

This creates a virtuous cycle: enforcement intelligence feeds renewal strategy, which produces better contracts, which generate more enforceable value.

Starting Point: Low-Risk Experimentation

The whitepaper recommends: "Organizations do not need to overhaul their entire indirect renewal process at once. Small, low-risk steps often produce the greatest momentum."

We've operationalized this advice into a practical starting point:

Phase 1: Value Discovery Audit (No-Cost, 2-3 Weeks)

Scope:

Analyze 5-10 high-value vendor contracts
Identify all value-claiming clauses (rebates, discounts, SLA credits)
Match 12 months of transaction data against thresholds
Calculate amounts owed with claim-ready documentation

What You'll Learn:

Exactly how much value is unclaimed in these specific contracts
Which vendors have enforceable rights you're not exercising
Where your processes are failing to capture contractual benefits
ROI potential if extended to full contract portfolio

Typical Findings:

$100,000-$500,000 in claimable value from just 5-10 contracts
3-5 systematic enforcement gaps across multiple vendors
Clear ROI case for scaled implementation

Investment: $0 (free value discovery to prove the concept)

Phase 2: Pilot Implementation (10-12 Weeks)

Once you've validated that unclaimed value exists, scale to 25-50 contracts with:

Automated contract and transaction data integration
Monthly monitoring and claim generation
Vendor submission and payment tracking
Measurable ROI: claimed vs. received

Phase 3: Enterprise Deployment

Expand to full contract portfolio with:

Preventive invoice validation (catch issues before payment)
Procurement workflow integration
Category-level value capture reporting
Renewal intelligence fed by enforcement data

The Contingency Model: Aligning Risk and Reward

Here's what makes this different from traditional consulting or software: AllCaps operates on contingency.

You pay 15-25% of actual value recovered. If we identify $500K in unclaimed rebates and successfully collect $500K from vendors, you pay $75K-$125K. If we collect $0, you pay $0.

This model addresses procurement's biggest barrier to adoption: budget constraints. You don't need to:

Get VP approval for a six-figure software license
Justify headcount for a dedicated rebate management team
Convince finance to fund a speculative project with uncertain ROI

You need to say yes to a no-cost audit. That's it.

If the audit finds nothing, you've lost nothing. If it finds $300K, you keep $225K-$255K and pay only when the vendor's check clears.

Bridging the Gap: Renewals + Enforcement

The Art of Procurement whitepaper asks the right question: "How do we bring structure to indirect spend that has long resisted it?"

The answer has two parts:

Part 1: Renewal Discipline

Apply consistent review processes before contracts auto-renew
Negotiate better terms using benchmarks and performance data
Secure rights that reduce future risk (TFC, SLA credits, price caps)

Part 2: Enforcement Discipline

Monitor contracts continuously for value-claiming opportunities
Submit claims systematically as thresholds are met
Track vendor payment and resolve disputes
Feed enforcement learnings back into renewal negotiations

Most organizations have Part 1 figured out (at least for strategic contracts). Very few have solved Part 2. And Part 2 often delivers faster ROI with less organizational friction.

Why This Matters Now

The whitepaper concludes: "Indirect renewals are no longer a peripheral concern. They are a strategic lever: financially, operationally, and in terms of governance."

Three trends make this urgency even more acute in 2026:

1. AI Is Redefining "Manageable Scale"

What was previously impossible due to volume constraints—monitoring 500 contracts for 5 value types each—is now trivial for AI. The bottleneck has shifted from "can we analyze this?" to "will we act on it?"

2. Finance Scrutiny Is Increasing

CFOs are demanding procurement demonstrate ROI beyond cost avoidance. Claiming contractual value is measurable, attributable, and immediate—exactly what finance wants to see.

3. Vendor Consolidation Increases Leverage Risk

As vendors consolidate and buying power concentrates, enforcing existing contractual rights becomes more important than ever. You may not win better terms at renewal, but you can ensure vendors honor the terms you already have.

Taking Action: Next Steps

The whitepaper recommends starting with "a handful of upcoming renewals" to test improved processes. We recommend starting one step earlier:

Before you negotiate better terms at renewal, claim the value you already negotiated.

Immediate Action: Free Value Discovery Audit

Identify 5-10 high-value vendor contracts (facilities, IT services, professional services, logistics)
Provide contracts and 12 months of transaction data (invoices, payment records, usage logs)
Receive detailed analysis showing:
- All value-claiming clauses identified
- Thresholds met vs. not met
- Calculated amounts owed with supporting documentation
- Claim-ready letters and spreadsheets

Timeline: 2-3 weeks from data receipt
Cost: $0
Obligation: None

If the audit reveals substantial unclaimed value, we'll propose a pilot to systematically claim and track recovery. If it reveals nothing, you've confirmed your processes are working and lost nothing but a few hours of data export time.

Longer-Term: Integrated Approach

Organizations getting this right are combining:

Enforcement focus for existing contracts (claim value already negotiated)
Renewal discipline for upcoming expirations (negotiate better terms)
Preventive controls for new contracts (catch issues before payment)

This integrated model turns contracts from static documents into actively managed assets that continuously generate value.

Conclusion: From Visibility to Value

The Art of Procurement whitepaper makes a compelling case that AI brings visibility to previously unmanageable indirect spend. That visibility is essential—but it's not sufficient.

Visibility without enforcement is just expensive reporting.

The real transformation happens when AI moves beyond analysis:

From identifying clauses to calculating amounts owed
From tracking thresholds to generating claim documentation
From monitoring contracts to managing vendor submissions
From reporting value to recovering value

AllCaps was built to operationalize this vision. We don't sell you software and wish you luck implementing it. We take on the operational burden—contract analysis, transaction matching, claim generation, vendor negotiation, payment tracking—and succeed only when you receive actual dollars.

The indirect spend problem the whitepaper describes is real, pervasive, and costly. The AI opportunity it identifies is transformative. What's missing is a bridge from insight to impact.

That's what AllCaps provides: not just better visibility into your contracts, but actual value recovered from them.

Resources

Read the Full Whitepaper:
Understanding Indirect Contract Renewals in the Age of AI
Joint publication with Art of Procurement

Request Your Free Value Discovery Audit:
[Get Started](contact {@} allcaps {.} ai ) — Identify unclaimed value in 5-10 contracts with no cost or obligation

Explore AllCaps Platform:
Free Contract Analysis Tools — Try our AI-powered contract analysis tools to see what you might be missing

Learn More:
How AllCaps Works — Understand our claims-as-a-service model and contingency pricing