Advance Renewal

Magazines are known for encouraging you to renew in advance of the expiration date, and sometimes it seems like it’s about six months ahead of time. Advance renewal refers to any type of agreement that has an expiration date, indicating you want to continue a subscription.

In addition to magazines, software licenses, internet domain names or hosting services, apartment and office building leases, or even mining claims could involve advance renewals. Many times incentives are offered if you renew early, such as discounted prices, but the main reason customers and companies agree to renew in advance is to avoid any disruption in services.

What would happen if the license for the software that everyone uses in an international company suddenly expired? It would be chaos, even if the downtime was for only an hour. The vendor benefits by claiming the revenue from the renewal early, and they will have a more reliable cash flow. They also won’t have to spend as much time and money going out to look for new customers.