For the right company, Excel or Google Sheets can work well as a contract management system. In this article, we’ll explore the benefits and drawbacks of doing so, and help you make the right choice.
Here are some of the benefits of using a spreadsheet for contract management.
1. It’s free
Most modern companies already use either Google or Microsoft office, both of which include spreadsheet software. This means that you’ll be able to build your own contract management spreadsheet without having to pay additional costs.
2. No unnecessary features
If you’re looking for a basic system of record, without the need for features such as reports, alerts and approval management, a spreadsheet could be the perfect solution. This is great when you have only a small number of contracts, and only require basic filtering and sorting capabilities.
3. Get up and running quickly
Almost every modern office worker knows how to use a basic spreadsheet. This means you won’t need to spend much, if any, time on training your team on how to use the system.
1. Lack of integration
Simplicity can be an advantage, but there will be drawbacks as the number of contracts increase. The data is separated from the contract, which means more time manually searching for Word and PDF documents. You won’t be able to easily integrate with calendars, reminders, and other systems, which means more manual work for each contract. This might work for a small number of contracts, but at a certain volume, we find that resource-constrained teams begin to feel the strain.
2. No place to attach important documents
Contracts are not static documents. There are amending contracts and various attachments such as statements of work. In a spreadsheet, there is no way to directly connect related documents to a given contract. Perhaps you could include a link to a shared drive, and hope that nobody moves, deletes or replaces that file. But it’s a precarious way to keep track of important documents.
3. Less security
These days, spreadsheets are easy to share and work well for collaboration. But what happens if you have a highly confidential contract that only certain people should see? Spreadsheets don’t allow access at that level of granularity.
4. Limited Workflow Management
In many cases, contracts require an approval process. For example, the Legal team may need to review all contracts, or the Finance team may need to review all contracts above a certain dollar value. If this process is managed via spreadsheets and emails, it increases the chances of manual error and reduces team-wide visibility.
5. Version control challenges
Contract documents frequently undergo revisions, amendments, and updates throughout their lifecycle. Maintaining accurate version control in spreadsheets can be challenging, as multiple users may be working on the same document simultaneously. Without a centralised system for version tracking and document history, it becomes difficult to identify which version of the contract is the most current. This can result in confusion, mistakes, and disputes over contract terms and obligations.
How a contract lifecycle management system solves the problems that spreadsheets don’t
1. A central hub for managing contracts
A modern contract lifecycle management system is much more than a repository of data. It should be the hub where your legal team manages approvals, e-signatures, filing, searching, renewals, amendments and more.
2. Attaching related documents
Real-world contracts can be complicated, and can sometimes consist of hundreds of different moving parts. A modern contract lifecycle management system should make it effortless to connect all these pieces together, so that you can reconstruct the history of the contract at a glance.
You should have complete control over who has access to particular contracts, or particular classes of contracts. Sensitive contracts should be kept safe from prying eyes.
Is a spreadsheet system the right choice for you?
A spreadsheet system has its advantages, particularly if you’re a resource constrained team with a small and fixed volume of contracts.
But if you have a large volume of contracts, or you’re growing quickly, you’ll likely want a more robust solution. If you’re after a product that is feature-rich and but that won’t break the bank, then Aerofiler might be the right choice for you. Contact us today to organise your free trial.