Do you use spreadsheets to keep track of your company’s key contracts? Not everyone thinks this works particularly well. Here are eight “headaches” we often hear mentioned when we start working with new customers.
1. Lack of overview
When you use spreadsheets to register your company’s contracts, it is quite a challenge to maintain centralised control. One simple reason could be that there may be several versions of the spreadsheet which, again, makes it difficult to ensure that the information in each individual file is up-to-date and reliable.
2. Not an archiving solution
Even if you do manage to keep a spreadsheet up-to-date, it is not a suitable format for storing the contracts themselves. The bigger the business, the greater the likelihood that contracts will be stored in multiple locations in the company’s digital financial system.
3. Manual work is a source of error
Administrating contracts in spreadsheets demands manual maintenance. This naturally increases the likelihood of having data entered incorrectly into the spreadsheets.
4. Normal use is a security issue
If spreadsheets are to function on even a fundamental level as a place to store contracts, the documents will by definition have to be shared between different departments. On account of this situation, access to the company’s most sensitive contracts will almost inevitably be granted to more people than is desirable or even strictly necessary – resulting in the spreadsheet(s) quickly becoming a security issue.
5. No seamless integration with the lifetime of the contracts
When an contract expires, it is usually time to renegotiate the terms and conditions. Alternatively, if you no longer need the delivery, it is time to terminate the contract. This is “contract management 101” for purchasers. However, there is no obvious functionality in a spreadsheet to warn you that an contract is approaching expiry and that action is required.
6. Cumbersome reporting
How many vehicles has the company leased? When is it time to renew the rental contracts for the shops in Sweden? How much will it cost to terminate the company’s outsourced IT deliveries? What is the income forecast for the coming year from our retainer contracts? We’re not saying that Excel is a poor tool for giving you answers, but a tool is available today that has been specially designed to generate reports on the significance of your contracts as they relate to your accounts.
7. Not adapted to IFRS
Under IFRS 16, companies are obliged to enter most of their major rental and leasing contracts in the balance sheet. Calculation of different accounts entries is not performed automatically in spreadsheets. Nor is follow-up the next year – or the year after that.
8. Person dependence
A spreadsheet set up and adapted to the company’s particular needs for administering contracts will, by definition, be dependent on the person who set it up – and no-one wants person dependence linked to the company’s consolidated obligations and current income.
Fortunately, there is a robust tool designed to handle the company’s contracts on both supplier and customer sides. Complete Control is a tool that eliminates all the above-mentioned weaknesses in using spreadsheets for the purpose. Would you like to find out more about how this software can help your business?
Recommended reading:
How many contracts do you actually have?
The costs of poor control
The checklist: Do you need a contract management tool?
Things to consider when buying contract life cycle management tools
31,000 users: 10 reasons why they chose House of Control
Why investors applaud when the CFO uses Complete Control
What determines ROI when you use Complete Control?