Today, many businesses still use Excel to track contracts because it is easy to use, familiar, and requires no upfront cost. However, as the number of contracts grows, Excel gradually becomes a “bottleneck” in operations.
So, is managing contracts with Excel really acceptable? And where do the biggest risks lie?
1. Why do businesses often use Excel for contract management?
- No need to invest in software
- Employees are already familiar with it
- Easy to create and edit files
- Suitable when handling only 5–10 contracts per month
👉 The problem is: Excel is suitable for simple data tracking, but NOT suitable for managing contract workflows.
2. Five major risks of managing contracts with Excel
❌ 1. Fragmented data – easy to lose
Each department maintains its own file → no centralized contract repository.
❌ 2. No version control
Who changed what, and when → impossible to trace.
❌ 3. No multi-level approvals
Excel is just a spreadsheet; it does not support approval workflows.
❌ 4. No contract deadline reminders
Forgetting renewals = lost contracts = lost revenue.
❌ 5. High security risks
Files can be easily:
- Accidentally deleted
- Sent to the wrong person
- Copied and shared externally
3. When does Excel become “dangerous” for businesses?
Excel starts to pose serious risks when a company:
- Manages more than 30–50 contracts per month
- Has two or more approval levels
- Has multiple departments handling contracts
- Begins experiencing data inconsistencies, delayed signing, or missed deadlines
👉 This is exactly the point at which businesses should move to a professional contract management software.
4. Quick comparison: Excel vs. Contract Management Software
| Criteria | Excel | Software |
| Centralized storage | ❌ | ✅ |
| Multi-level approvals | ❌ | ✅ |
| Automatic reminders | ❌ | ✅ |
| Version control | ❌ | ✅ |
| Audit log | ❌ | ✅ |
| Digital signatures | ❌ | ✅ |
5. An effective alternative to Excel
Instead of:
- One master Excel file
- 5–7 people editing simultaneously
- Increasingly chaotic data
Businesses should:
✅ Use centralized contract management software
✅ Automate approvals, alerts, and digital signatures
✅ Manage the entire contract lifecycle in a single system
🔗 Learn more: What is Contract Management Software?