How To Manage Contracts In Excel

Content

• How to create a contract management template in Excel?
• Contract Database in Excel
• Locating Contracts in Excel
• Tracking Contract Key Dates in Excel
• Why do businesses prefer Excel contract management?
• What are the limitations of managing contracts using Excel?
• Is there an alternative to Excel Contract Management?
• Conclusion

As businesses expand, there’s a need for structured contract management. Organizations can no longer get by with scattered emails and drives when contract volumes reach the thousands. With the United States being one of the world's leading Microsoft users, Excel is the preferred tool for most companies to manage contracts. It works too!

Excel can bring all of your contracts and related information under one roof. It’s accessible, user-friendly, and efficient at capturing high-volume data. But is it always effective? Learn how to manage contracts with Excel in this article, along with its advantages, drawbacks, and workarounds.

How to create a contract management template in Excel?

Excel provides a singular platform for capturing, organizing, and tracking contracts. Throughout a contract's lifecycle, companies need to monitor its status, deadlines, and milestones. It gives a holistic view of the contract portfolio, so there’s accountability and transparency at every step. Excel enables multiple parties to collaborate and keep track of any changes made to the spreadsheet.

Contract Database in Excel

Creating a contract database in Excel is a great way to centralize all your contract information in one place. At a glance, you can easily access all the relevant details. The first step is creating columns for essential contract information such as contract number, vendor name, start date, end date, payment terms, etc. 

Contracts include a plethora of information. Organizations must restrict the fields they enter into Excel sheets to data pertinent to their business. It guarantees that you are only tracking the details that matter. The following fields are essential to all contract types and enterprises:

• Contract ID: A unique identifier for each contract.
• Start date: The effective start date of the contract.
• End date: The date the contract expires or is due for renewal.
• Parties involved: The names of the entities or individuals bound by the contract.
• Contract value: The financial worth of the contract.
• Payment terms: Details of how and when to make payments.
• Status: Current state of the contract (active, pending, expired).
• Notes: Space for additional information or special conditions.

Locating Contracts using Excel

Even beyond execution, businesses still need access to active contracts to track obligations, performance, and compliance. That is why storing them across multiple folders or files can make it challenging to locate them.
Excel makes it simple to filter and arrange contracts once you have all the information in one location. 

Thus, businesses can conveniently search for specific contracts or parties. They can use filters to narrow their search based on criteria such as contract status or expiration date. Organizations can also add hyperlinks to related documents or attachments within the spreadsheet to access contract terms, agreements, or supporting documents.

Tracking Contract Key Dates in Excel

Parties must stay on top of contract milestones and deadlines throughout the contract lifecycle. Excel can help you set up reminders and alerts for contract renewal dates, payment deadlines, and other critical milestones. Businesses can use conditional formatting to highlight upcoming deadlines. 

Alternatively, they can use a color-coding system to assign different colors to different contract statuses, making it easy to determine which contracts require immediate attention. For instance, organizations can easily monitor the days left for contract renewal or expiration using Excel formulas.  To get started, create a "Days Left Until Renewal/Expiry" column and enter =Due Date-TODAY(). As a result, companies can quickly identify impending deadlines.

Why do businesses prefer Excel contract management?

One of the key advantages of using Excel for contract management is its user-friendly interface. Since most people are familiar with Excel's fundamental features, creating and customizing contract templates is simple. With Excel, there is no need for extensive training or onboarding, as most employees are already proficient in using the program. They can quickly begin organizing contract-related information and keeping track of relevant dates and deadlines.

Cost-effective solution

Most organizations already have access to Microsoft 365 and Excel. Unlike specialized contract management software, Excel is a one-time purchase for most users and does not require ongoing subscription fees. It makes it a budget-friendly option for businesses of all sizes, especially for smaller organizations looking to streamline their contract management processes without breaking the bank.

Data security

Excel also offers a high level of data security for contract management. Users can password-protect their Excel files, restrict access to specific individuals or teams, and track changes made to the document. It ensures that sensitive contract information remains secure and confidential, mitigating the risk of data breaches or unauthorized access.

Visibility

Excel provides users with unparalleled visibility and customization options for managing contracts. With Excel's powerful filtering and sorting capabilities, users can easily search for specific contract terms, track contract performance metrics, and generate custom reports. This level of visibility allows organizations to make informed decisions and quickly identify potential issues or discrepancies within their contracts.

What are the limitations of managing contracts using Excel?

Many organizations turn to Excel for managing their contracts due to its familiarity and ease of use. However, while Excel may seem like a convenient solution, it has several limitations that can hinder effective contract management. Firstly, Excel doesn’t have the means to draft, negotiate, or sign legal agreements.

1. Data entry

When a new contract is signed, someone on the team must input all the relevant information into the spreadsheet. This process is not only time-consuming but also prone to errors. Typos, missing information, and inconsistencies can occur during data entry, leading to inaccurate contract records. Furthermore, maintaining and updating the spreadsheet gets tiresome as the number of contracts rises.  

2. Information transfer

It can be challenging to move data between systems when companies store contract data in Excel spreadsheets. It can lead to manual errors, data inconsistencies, and inefficiencies in contract management processes. Organizations may have to devote more time to keeping contracts up-to-date and synchronized across various platforms without a seamless way to transfer data.

3. No automated reminders

Excel does not have built-in features for setting reminders or notifications for contract dates, such as renewal dates, deadlines, or milestones. It means that contract managers have to rely on manual methods and constantly monitor Excel sheets. It increases the risk of missing deadlines or overlooking critical contract terms. Automated reminders are essential for ensuring timely contract management and compliance with contractual obligations.

4. Security concerns

Excel files are often stored on local devices or shared drives, making them vulnerable to unauthorized access or loss. Sensitive information could be readily accessed without adequate encryption or access controls, putting the business at risk of data breaches or compliance infractions. Furthermore, sharing Excel files through email or cloud storage services can expose contract data to security threats. Once a file is sent or shared, it's challenging to control who has access to it and how they use it.

Is there an alternative to Excel Contract Management?

As the first step towards structured contract management, Excel spreadsheets are quite handy. They will compile your contact details in one place and offer a holistic view. However, as the organization scales, Excel can’t keep up with renewal dates and other crucial data. This lack of centralized and automated tracking can lead to missed deadlines, overlooked terms, and potential contract disputes. That is why a solution like Dock 365, designed for contract management, better serves your purpose.

Centralized contract repository

Dock 365, built within your existing Microsoft 365 environment, allows parties to store contracts and related documents within the SharePoint centralized repository. Parties can more easily access contract data by gathering contractual agreements in one location. They can easily store, arrange, and retrieve contracts while tracking the dates and milestones. 

Template and clause libraries

Our all-in-one platform allows businesses to create competent contracts using pre-approved templates. To generate contracts for diverse uses, such as NDAs, SOWs, employment agreements, etc., users must input custom details into pre-written contract templates. The extensive clause library lists all the terms and conditions essential for business contracts. Thus, they don’t have to create agreements from scratch every time and standardize content across the organization.

Advanced search and filtering

Dock 365 also offers advanced search and filtering capabilities. Businesses can use keywords, dates, and other criteria to find specific contracts. Thus, organizations can find the necessary information, saving time and ensuring compliance. With advanced search and filtering features, parties can effortlessly locate contracts with upcoming deadlines and take timely actions to ensure performance.

AI contract data extraction

It can take a lot of time and be prone to errors to manually go through several contracts and extract pertinent dates. Therefore, Dock 365 automatically extracts relevant data points from contracts with AI and OCR technology. It includes renewal dates, deadlines, and obligations. AI contract management saves time on manual data entry and reduces the risk of human error. Automated data extraction allows businesses to accurately capture all relevant data.

Custom reporting

Dock 365 allows users to filter and sort the data they want in a custom contract report.  As a result, they can remove the possibility of non-compliance and quickly determine the approaching milestones for any number of contracts. The customizable dashboard also ensures there’s no overflow of information. For instance, procurement teams create specific dashboards to demonstrate vendor agreement dates and deadlines. 

Automated alerts

Our contract management software allows businesses to schedule recurring notifications regarding relevant contract activities and due dates. They can set up alerts for specific contract statuses or dates, such as commencement, renewal, review, etc. Thus, relevant parties will receive timely notifications to alert them to the upcoming commencement date.

E-signature solutions

Dock 365 also streamlines the contract execution process. The platform seamlessly integrates with e-signature solutions like DocuSign, Adobe Sign, and Sertifi, allowing organizations to sign contractual agreements on a single platform.

Conclusion

Excel can be a useful tool for contract management, especially for small businesses or those with a manageable number of contracts. You can efficiently track and manage your contracts with this recognizable and user-friendly tool by making a thorough contract management template and adhering to best practices.

However, as your business grows, be prepared to reassess your needs and consider the benefits of dedicated contract management software. Whichever route you choose, the key to successful contract management lies in staying organized and proactive in tracking your contracts' lifecycle.

Schedule a free demo today to learn more about our contract management solution.