Mastering Contract Management With Excel [+ Free Template]

While Microsoft Excel is primarily known as a spreadsheet application, its versatility allows it to be used for various purposes, including contract management. 

The tool allows business teams to draft, negotiate, execute, and track contracts from its familiar interface. But this can quickly become a headache for growing businesses when onboarding contracts in large volumes. 

Excel’s contract management features are significantly limited, resulting in degraded efficiency, performance delays, and compliance issues when used to manage complex contracts at scale. 

That said, you should only use Excel for contract management if you’re on an extremely lean budget, handling just a handful of contracts

In this guide, we will get into the details of why many businesses still use Excel for contract management, its limitations, how to use it to its maximum potential, and a much better way to manage your contracts.

We’ve also included a free contract management Excel template you can use to hit the road faster.

Why do businesses leverage MS Excel to manage contracts?

Excel is primarily used for collecting, manipulating, and analyzing data. But over the years, it has found relevance in many other use cases and has become a popular multipurpose tool among business teams, including contract managers.

But why do some businesses trust Excel for contract management? We’ve discussed a few reasons below.

#1 Flexibility and customization

Excel offers a wide range of features that can be tailored for multiple use cases. Whether you’re in finance, sales, project management, or legal, Excel can be adapted into the contract management process to make it more efficient.

With Excel, you can create contract templates and structures using elements that are relevant to your needs. You can track key dates, calculate financial details, or organize contract terms, all within its interface, regardless of your field of expertise.

#2 Familiarity and accessibility

Excel ranks among the most popular spreadsheet apps in the world, with over 1 billion users reported in 2023. Given the popularity of Microsoft applications, it is not surprising that even legal teams are familiar with it—at least at the basic level.

This means the learning curve for its contract management functionalities is potentially short.

Also, Excel is a part of the Microsoft Office Suite used by hundreds of thousands of enterprises globally. This makes it accessible to many employees, including legal teams and contract managers.

#3 Cost-effectiveness

Compared to dedicated contract management software, Excel is often the more cost-friendly option, especially for small and medium-sized businesses with limited budgets. 

This is because Excel is typically included in Microsoft Office licenses, which many organizations already have. 

This eliminates the need for additional software purchases and associated subscription costs, making it an attractive choice for businesses within budget constraints.

#4 Integration with other business tools

Excel seamlessly integrates with various business tools commonly used in organizations. For example, you can link Excel spreadsheets with other Microsoft Office applications like Word, PowerPoint, and Outlook, allowing for efficient data sharing, document generation, and email communication. Additionally, Excel can be integrated with third-party software solutions like CRM or project management tools, enabling smoother workflows and data exchange between different departments.

#5 Ease of implementation and rapid deployment

Excel's user-friendly interface and widespread availability contribute to its ease of implementation and deployment.

Since Excel is already installed on most computers, there is no need for extensive software installations or IT infrastructure modifications. Setting up a contract management system in Excel typically requires minimal technical expertise. You can quickly create and configure spreadsheets to track contracts, monitor expiration dates, and set up reminders, among other things.

Best practices to manage contracts on MS Excel

Are you looking to take the first plunge into automated contract management with Excel? You must note that Excel’s contract management functionalities are basic, and to maximize its capabilities, there are certain things you must put in place.

#1 Structure your spreadsheet

Structuring your Excel spreadsheet in a logical and organized manner makes it more accessible and manageable. Create separate columns for key contract information such as contract number, parties involved, effective date, expiration date, obligations, and other relevant details. 

You can also use separate sheets or tabs within the Excel file to organize all your contracts in different categories.

#2 Validate your data

To minimize the risk of errors or inconsistencies, it is important to validate the data entering your Excel spreadsheet. You can use data validation techniques to restrict inputs to specific formats or values. Implement error checks, such as conditional formatting or formulas, to highlight discrepancies or invalid entries.

For example, you can set up data validation to ensure that dates are entered in a specific format (e.g., DD/MM/YYYY) or fall within a particular range. This prevents the accidental input of incorrect or invalid dates. Similarly, you can define a list of valid options for certain fields, such as contract types or payment terms, and use data validation to restrict entries to those predefined options.

#3 Establish standardized contract naming and numbering conventions

Establish a consistent naming and numbering convention for your contracts to facilitate easy identification and retrieval. 

This can include using a combination of alphanumeric characters or specific codes representing different contract types, departments, or other relevant criteria. By standardizing the naming and numbering, you can quickly locate specific contracts and maintain consistency across your contract management ecosystem.

Also read: How to Standardize a Contract in 7 Easy Steps

#4 Setup a document management and version control strategy

Ensure you adopt an approach for managing contract documents within Excel. Store the contracts in a centralized location, such as a shared drive or cloud storage, while maintaining a clear naming convention for all files.

Maintain version control by adding a column to track the version number or timestamp for each contract to differentiate between different iterations. Ensure you track every modification made to the contracts, including the date, author, and summary of changes

“Version control is key to contract risk management.  The most important element of version control is to ensure that everyone (Sales, lawyers, etc.) starts every deal using the appropriate [document].”

~ Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: Minimizing Risk In Commercial Contracts

Also Read: Ensuring Contract Version Control—Best Practices to Streamline Legal Operations

#5 Utilize formulas and functions for automated calculations

Excel offers a wide variety of formulas and functions that can automate calculations and streamline contract management tasks.

Set up these formulas and functions to automatically calculate payment amounts, track payment milestones, calculate renewal dates based on the contract duration, and generate reports summarizing contract metrics. This will eliminate manual calculation processes and minimize errors.

#6 Regularly backup and secure the Excel spreadsheet

To prevent data loss, ensure you have a regular backup strategy for your contracts. This can be done by creating backup copies of the file or using cloud storage services.

You should also keep your contract documents away from unauthorized personnel using security features like password protection, encryption, or restricted access permissions. 

Furthermore, ensure you regularly update the Excel software to keep up with any new vendor-side implementations in the underlying security infrastructure.

“Ransomware attacks succeed, in part, because the victim has no access to their critical data or files.  If you have a regular (and secure) backup of your systems or critical data, you remove one of the key bargaining chips in the hands of the bad guys.”

~ Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: Ransomware – What In-House Counsel Need To Know

#7 Track obligations and deadlines

Maintain a comprehensive overview of contractual obligations and deadlines in your Excel spreadsheet. You can use separate columns or fields to record key milestones, deliverables, payment schedules, and other important dates or tasks associated with the contract.

Use conditional formatting or color-coding to visually highlight approaching deadlines or overdue tasks. Ensure you set reminders or alerts for critical milestones to facilitate timely action. 

Furthermore, regularly review and update the spreadsheet to reflect any changes in obligations or deadlines and communicate these updates to relevant stakeholders.

#8 Stay updated with contract renewals and expirations

Create a system to track contract renewals and expirations in Excel. You can identify contracts nearing expiration dates by implementing conditional formatting or formulas in your spreadsheet. 

Additionally, set reminders or alerts well in advance of renewal or termination dates. This gives you sufficient time for contract renegotiation or renewal discussions if required.

It is also essential to have a centralized record of contract renewal negotiations and outcomes for future reference.

Also read: 8 Top Contract Management Software Platforms

Creating a template for contract management in Excel: Fields to include

“The absence of contract templates leads to non-standardization and makes contracts prone to errors. The legal team, therefore, is required to delve deep into contracts and proofread all clauses with a fine-tooth comb to identify and rectify the simplest of human errors.”

~ Igor Poroger, Director of Legal, EMEA, Vectra AI
How CLMs Empower Legal Teams in B2B SaaS Companies

A contract management Excel template saves you the hassle of building out a new spreadsheet every time a new contract is underway. It offers predefined columns and sheets with basic automations you can leverage to get your contract documents up and running in less time.

The specific fields you include in your contract documents often vary according to the nature of your business and the contract in question. However, to create a robust Excel contract management template, there are certain fields or data points you must include.

We’ve listed some of them below:

• Contract ID: A unique identifier for each contract.
• Contract name: The name or title of the contract.
• Parties involved: Names and contact information of the parties involved in the contract (e.g., company names, addresses, contact persons).
• Contract type: The type or category of the contract (e.g., sales, procurement, employment).
• Contract start date: The date when the contract becomes effective.
• Contract end date: The date when the contract expires or is terminated.
• Contract duration: The duration of the contract.
• Contract value: The monetary value or amount associated with the contract.
• Payment terms: The agreed-upon terms and conditions for payments (e.g., payment schedule, currency, method).
• Key obligations: The main responsibilities or obligations of each party under the contract.
• Contract termination clause: Any provisions or conditions specifying how the contract can be terminated.
• Renewal options: If applicable, details about options for contract renewal or extension.
• Contract scope: A brief description of the scope or purpose of the contract.
• Governing law: The jurisdiction or legal system under which the contract is governed.
• Confidentiality and non-disclosure: Any clauses related to the protection of confidential information.
• Dispute resolution: The process or mechanism for resolving any disputes that may arise.
• Insurance requirements: If necessary, any insurance requirements specified in the contract.
• Amendments: A log of any changes made to the contract.
• Contract status: A field to track the current status of the contract (e.g., draft, active, expired, terminated).
• Notes/Comments: An area to include additional notes or comments regarding the contract.

FREE Excel contract management template

While creating a contract management Excel template from scratch can be rewarding, it can be tough and time-consuming, especially for busy professionals.

This is why we’ve come to the rescue with our free template. This template is loaded with several standard fields and automations alongside a comprehensive usage guide. 

All you need to do is enter specific details about any contract, and the spreadsheet will track expiry dates and other important contract data for you using automated emails.

Limitations of contract management in Excel

Thanks to its familiarity, Excel is a popular choice for contract management among legal professionals and business teams. However, while it exposes you to the possibilities of automation in contract management, it is not built specifically for this purpose.

Using Excel for contract management comes with several limitations, some of which we’ve explained below.

#1 Excel can’t handle contracts at scale

Excel is not designed to handle large volumes of contract data or sophisticated contract structures. So, as the number of contracts, volume of associated data, and general complexity increases, the tool can slow down and become unstable.

At this point, managing contracts within Excel will become inefficient and counterproductive.

#2 Its automation capabilities are limited

Excel has basic automation functionalities for calculations and conditional formatting. However, robust and contract-specific features like automated approval workflows, electronic signing, intelligent drafting, review requests, and more are unavailable in Excel.

Some of these processes are pretty routine in contract management. So you'll have to handle them manually (and painstakingly) while using Excel.

‍Also read: What is Contract Automation? Expert Tips & Insights

#3 Collaborating on Excel can be daunting

Multiple users can't work on a single Excel document simultaneously. The platform often lags during simultaneous editing by multiple users, resulting in conflicting data. Moreover, the correction of conflicting data in Excel is a manual and time-consuming process.

Also, when an Excel document is shared with multiple users, some features like conditional formatting, data validation, and charts can become unstable. Before sharing the document with your team, you’re better off disabling these features.

Excel does not support real-time collaboration. This means you cannot see another user's changes unless they save them. To see the latest changes, you'd have to refresh the spreadsheet from your end.

Also read: Unlocking Efficiency with Contract Collaboration Software

#4 Its reporting and analytics features are limited

Excel's reporting capabilities are limited compared to dedicated contract management software. 

Generating complex reports, tracking contract performance metrics, and conducting in-depth analysis can be challenging and time-consuming in Excel, especially when dealing with large volumes of data.

Also read: How to Use Contract Analytics Software to Uncover Insights

#5 There are multiple compliance and regulatory challenges

Excel lacks robust security features, making contracts prone to unauthorized access and data breaches. If your contract involves sensitive information, such as personally identifiable information (PII) or financial details, you must employ extra measures to ensure adequate security and compliance with data protection regulations like the General Data Protection Regulation (GDPR), HIPAA, or industry-specific standards.

“The thing about privacy is identifying what data is involved, how we are sharing it, and how we are going to be compliant in that sharing.”

~ Ken Priore, ex-Director of Privacy, Atlassian
Mastering the Intersection of Law, Technology, and Privacy

Additionally, Excel's version control and audit trail features are limited. If your industry has stringent record-keeping policies, using Excel will put you at a higher risk of compliance issues.

Furthermore, Excel lacks the robust functionalities required to keep track of compliance-related obligations, making enforcement difficult.

Also read: What is Contract Compliance? The Ultimate Guide

SpotDraft: A more efficient way to manage contracts

Excel is essentially a multipurpose platform with several basic-level features. Thus, its contract management capabilities are generic and come with several limitations. To effectively manage your company’s contracts, regardless of scale and complexity, you must adopt a specialized contract management tool.

SpotDraft ranks among the industry's best Contract Lifecycle Management (CLM) platforms for many reasons, from its wide range of reliable features to its responsive support team.

Unlike Excel, SpotDraft never breaks down or lags when you process contracts in large volumes. In fact, SpotDraft is built to scale with your business. Its contract repository allows you to house your entire contract documents in one secure and searchable location. This boosts visibility, enhances collaboration, and keeps you more organized.

SpotDraft comes with robust automation capabilities, allowing you to automate complex contract management tasks that you'd typically handle manually in Excel. These include automated approval workflows, AI-assisted drafting, automated review requests, follow-ups, and more.

Additionally, SpotDraft comes with a slew of robust templates enriched with legal guardrails and automated workflows to enable you to launch contracts rapidly without compromising on quality and compliance.

“I have seen a demo of SpotDraft’s CLM technology, and they should be on your short list of vendors to talk to about a contract management system. In particular, I like their new templates feature (44 templates and counting) and how they can help you create contract playbooks.”

~ Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: “Cool Tech” For In-House Counsel (2022 Edition)

Furthermore, SpotDraft empowers you with data-driven insights through its reporting and analytics tools. With these tools, you can identify your best-performing contracts, uncover bottlenecks, and optimize for better productivity.

There's so much you can do with SpotDraft; we can't cover them all in one section. But if you'd like to get a close-up view of how it can boost your contract management productivity, request a demo.

Embracing the right tech for contract management

Using Excel for contract management is like tightening a screw with a butter knife. It might get the job done, but is it the best tool for the task? Absolutely not!

Many businesses use Excel for contract management because it is readily accessible and has basic features they can use to draft, negotiate, and track contracts. Like a butter knife, it gets the simple tasks done. But as your business grows and your contracts get more sophisticated, its flaws begin to show. It begins to lag, forces you into manual overrides, and put you at multiple compliance and regulatory risks.

To avoid all that hassle, you must use a CLM, a tool that’s explicitly built for managing contracts throughout their lifecycle. Stop improvising with contract management, click here to see how SpotDraft can be your game-changer.