Contract management via Excel: why this is not a good idea!

Do you manage your contract data in an Excel spreadsheet? If so, it’s time to rethink the way you manage your contracts, because there are much more effective, secure and user-friendly ways to do it.

The risks of using Excel for contract management

Excel is useful. There’s a reason it’s used in almost every company - data entry is easy, and you can change and share it on a whim.

But that’s exactly why Excel is a poor choice for contract management. Here are some of the reasons why using Excel for contract management can be a stumbling block.

1. Lack of control

Excel spreadsheets are open files that, in reality, offer no monitored access controls. This means that almost any employee:can create, access, manipulate or share contract data. Since there are few audit or version controls, things can be changed in an Excel spreadsheet with no way to prove who made those changes. This is a major drawback to contract management via Excel.

2. Prone to errors

Excel spreadsheets rely heavily on manual data entry, so it is easy for staff:ers to make mistakes. Even minor clerical errors can have a negative impact if not corrected in a timely manner. And when they do occur, it can take hours to clean up and correct the data.

3. Inaccurate data

The data used to manage your company’s contracts must be accurate. Inaccurate data due to errors can lead to unintended costs, non-compliance, and compliance issues. Therefore, error-free contract administration is critical to their usefulness.

4. Inadequate reporting capabilities

Creating reports from Excel spreadsheets can take a lot of time, and it can be difficult to go beyond basic analysis without being an Excel expert. If you need deep insights or data from multiple sources, an Excel spreadsheet simply isn’t up to the task of providing them.

5. Lack of a secure audit trail

In an organization with multiple locations and employee:s, monitoring and analyzing data from multiple sources can overwhelm Excel. Additionally, there is no record of each person’s activities, making audits difficult. With a secure audit trail, every action can be digitally tracked to determine who did what and when.

6. Non-standardized

It is difficult to implement a standard method for entering, organizing, and analyzing contract data in Excel spreadsheets. Each employee may do things differently, even if there is a template for a contract management spreadsheet in the company. As a result, there is often no consistency in contract data.

7. No automated workflows or notifications

Also, there are no automation features in a contract management Excel such as automated workflows and reminders. This means that deadlines can be missed, such as when a contract expires or an automatic renewal of a contract is overlooked.

Key questions to ask to determine, how risky Excel is as a contract management tool in your business

• How many versions of a single Excel spreadsheet are there? Which one is the correct one?
• Who can view or modify the Excel spreadsheet? Should these people have these access rights?
• Is there documentation on how this spreadsheet processes data?
• How do you ensure that unauthorized users cannot manually overwrite the content?
• What built-in auditing function tracks changes and restricts authority?
• How will the current version of this Excel contract management be secured?

When you consider these questions, it’s clear that Excel contract management spreadsheets are complex to set up, a nightmare to keep track of, and risky to maintain.

Conclusion

By automating and digitizing contract management processes, a company can eliminate inefficiencies and set itself up for greater productivity and growth. The company can be confident that the right things are being done at the right time. With contract management software, all contract lifecycle activities are managed in a single, powerful system, ensuring that no legal obligations are overlooked. Such specialized contract management software is far superior to a classic contract management Excel.