Excel spreadsheets are user-friendly, and are used by almost everyone in a business environment. Although it doesn’t require much labor, there are many flaws that can be seen if you use Excel in your business or job for essential tasks. Also, one of the main purposes of contract management is dealing with a large number of contracts, so Excel sheets are usually a preferred method of keeping track of them.
Spreadsheets are seen to be easily accessible, available on any device, and are also free of cost. However, as the organization becomes more complex, Excel becomes a much less effective way of keeping track of contracts.
In this article we are going to focus on the disadvantages of Excel and why you should replace it with the alternatives present in the market for contract management.
1. Manual data entry is prone to errors
Many companies still require employees to enter the statistics on spreadsheets. If the amount of data is small, then there won’t be many problems. But, to enter a wide range of statistics, it can be problematic.
It’s obvious that when we use manual data entry, there is a lot of opportunity for error to occur. In checking these errors, a significant amount of time might be wasted, and the error rate is over 1% on most manual data entry. Manual data entry is a very slow and time-consuming process. Simple errors like a change in decimal point or an incorrect copy/paste can also create utter chaos.
All manual data entry should be avoided if there is a huge contract at stake — any errors may cost you a lot of money.
2. Difficult to manage contracts with the help of spreadsheets
With the burden of pouring through piles of contracts, some companies can never keep track of these documents. While one of the major objectives is to organize your spreadsheet, it doesn’t sound practical.
The spreadsheets are spread across folders as duplicate files or scattered in various computers written according to the details on the contract. Other than that, the spreadsheet isn’t technologically advanced enough to locate on quick notice, especially if disputes arise within the contract. As such, there is always going to be a challenge in dealing with these types of issues.
3. Data security risks are higher
The top concern when using software programs in business is bulletproof security. Spreadsheet programs aren’t very secure at all.
Although spreadsheets have passwords, they lack high-security encryption which means with a little effort and knowledge, others can log in and go through confidential information. Also, if a spreadsheet is kept in a restricted area, it might not be available when someone needs to access it. Moreover, the confidential files cannot be kept in a shareable drive folder where there are possibilities of data being leaked.
4. Contract lifecycle is difficult to function with the use of spreadsheet
Spreadsheets or Excel lack the adequate function of managing a contract. Contract management lifecycle needs a lot of dedication to keep track of the contracts and make use of them within the right timeline. Monitoring contract performance is a must and it contains confidential information, so it must be handled with care. Dedicated contract management software, meanwhile, contains built-in notification and reporting features, reducing the stress and workload that can lead to overlooked details.
There are several advanced software programs to deal with contract management, but people usually choose the traditional way — I.e. Excel spreadsheet. So, it is highly recommended to enhance your knowledge, and use proper contract management software.
5. Difficulties faced in reporting as well as analyzing the data
Trend analysis and keeping track of data with in-depth research is necessary to run a business successfully. A spreadsheet provides the ability to store static data, but comprehensive analysis is difficult, leading to many manual processes including function entries. This can be time-consuming, which results in more problems with real-time analysis and decision-making. Thus, there are many issues that you will face when reporting or analyzing the data as it is a lengthy process.
Conclusion
Although Excel or other spreadsheet programs are user-friendly and have a lot of popularity in office settings, it is high time to stop using these antiquated methods of storing and analyzing data. They have become outdated, and it is highly advised that you stop using such applications to store contract data.