Creating a Contract Repository: From Excel to CLM-Software

The core of the problem is often that many employees no longer receive the necessary attention to manage contracts after all parties have signed them. As a result, contract documents are often not stored at all, incorrectly or only partially and are therefore not usable by all users.
This often means that contracts or contract templates have to be set up again and again, individual employees create their own local storage of contracts, and a large amount of information and lessons learned from contracts that have already been signed are lost.

In the following, we will take a closer look at the various options with which you can expand a solid contract archive with just basic means. This should be able to ensure sufficient availability for signed contracts within the company.

Method 1: Using central drives and folders

The first step towards a functioning central contract database does not necessarily have to involve a great deal of effort. A lot can often be achieved with just a little effort.

In many cases, it can be enough to store contracts neatly and securely in a self-created folder structure on a central drive. In order to achieve this even during the stress of everyday life, a responsible person must first be appointed who will take care of filing the contract.

A person responsible for filing contracts should also always be appointed for individual projects. Always include this person on your email distribution list when communicating the contract versions so that working copies are also included in the filing system.

If the person responsible for filing contracts changes with each project, you should also think about a uniform nomenclature of the stored contracts: In this way, you can ensure that the correct contract version can also be found by uninvolved third parties.

And how do you do that? In many cases, it has proven useful to always include the date of the contract, the project name and, in the case of several rounds of negotiations on the same day, a version number in the file name. In practice, it often looks like this: 2021-02-21 project name/product name customer name/supplier name v2.docx.

It is a good idea to use the name of the other party as the name of the recording folder on your central drive. Tip: At this point, avoid any project names or abbreviations that no one will be able to remember in 2 years.

Folder structures create an initial overview

If a large number of files already exist within the company, you should also think about tagging the various contracts. This provides a simple overview of keywords and enables you to quickly find the contracts you are looking for by category. For example, rental contracts can then be collected again in a short period of time.

If you follow these simple guidelines consistently, you will get very good centralized availability of contracts with little effort. At the same time, however, it also means that new contracts must always be added anew. Another disadvantage: In order to control risk positions and deadlines, it is still necessary to open and examine contracts individually.

Method 2: Create a simple contract database in Excel

A simple and above all cost-effective addition to the central filing discussed above is the creation of an Excel spreadsheet with the most important contract information. Such an Excel directory not only promotes the order and clarity of individual contracts, but also allows your employees to recognize the most important information at first glance without having to read the entire contract first.

The Excel spreadsheet can then be used either independently or in addition to the main folder structure. In it, key parameters, such as the respective contract type, the contract amount, persons involved and deadlines, can be easily added and presented.

In addition to the above-mentioned clear presentation of key parameters, the table also enables simple but useful and effective risk management. For example, risk analyses can be aimed at, which determine the contract volume based on individual risk parameters.

Here too, similar to the administration and filing of contracts, it is important to designate a person responsible for entering the parameters. At this stage in the process, too, it is advisable to select this person beforehand so that the key parameters are not forgotten.

It is also important that the person also ends up on the email distribution list for the final negotiated contracts. Otherwise, despite clarification of responsibilities, the data cannot be maintained, as otherwise the triggering cause will be missing.

Bereit anzufangen?

Excel-Sheet herunterladen und den ersten Schritt ins Vertragsmanagement machen.

Method 3: Using a dedicated contract database

However, as soon as you have to work with larger amounts of data and many people are directly involved, it makes sense to think beyond an Excel spreadsheet and implement your own contract database. The limitations of simultaneous processing and the limited amount of data alone will push Excel to the limits of what is feasible at some point.

A dedicated contract database allows various departments to access all existing or completed contracts. To do this, the corresponding groups simply need to enter their key parameters into an input mask and upload their signed version of the contract.

As a result, all parameters should end up in a database specifically set up for this purpose and all signed contracts should therefore be centrally accessible to anyone who has an assigned access authorization. Especially for interdisciplinary work in companies, such a database is very effective and requires little effort.

The only drawback here is programming. At the same time, having your own database also means that it must be programmed specifically to your own requirements. This requires in particular the IT department, which would have to take care of the maintenance, problems that arise and the general coding of the system.

Method 4: Outsourcing contract management to external service providers

If your company has no capacity or only limited resources to program its own dedicated database, we recommend that you use external service providers for contract management.

External service providers are specialists in their field and can already provide you with proven contract data storage. Once the database is provided, your task is limited to uploading completed contracts. Your employees can then access them from the start of operation and add new ones. This means that all contracts are organized neatly and intuitively.

The provider is responsible for ongoing maintenance and development of your contracts. This is particularly good if they do not want to spend any further internal resources on maintaining their own databases and infrastructure or do not have the necessary capacities.

However, the use of an external service provider requires careful examination due to the increased security risk for your data. Sit down with various providers and carefully consider which one you choose. Many providers only work with selected CRM systems, while others only offer limited functionality. Some providers, in turn, only work with American servers or licenses.

Even with external providers, you often don't spare yourself the tedious process of creating contracts and incorporating knowledge you have gathered so far. It is also important to note that you must train your employees to ensure effective use.

5th method: Using existing CRM systems for contract management

Larger companies often have comprehensive CRM systems (“customer relationship management”). Such systems, which are primarily used to manage customer relationships, can often also be used to manage your contracts. However, further steps are required to integrate a fully-fledged contract database.

Documents relating to an existing customer relationship can usually be added to existing CRM systems. The same applies to contracts, of course. With just one click, you have all the contracts, offers and presentations that the customer has received from you over time. This makes it possible for every authorized employee to obtain a comprehensive impression of the individual customer.

The flip side of the coin, however, is that the expansion of an existing CRM system unfortunately often involves some not inconsiderable costs. On the one hand, additional modules usually have to be purchased for contract management or existing systems must be expanded through additional programming effort. In addition, in most cases, employees need extensive and intensive training in order to be able to use the new systems effectively. If this is done, nothing stands in the way of successful use.

However, the automatic recording of key parameters remains a downside. This is simply not possible in many CRM systems.

Best practice: CLM software as a complete database

The last stage on the road to comprehensive contract management is dedicated contract lifecycle management software. As the name suggests, this involves contract management over the entire life cycle of a contract.

Nowadays, the use of efficient CLM systems in companies is no longer a rarity. Even with little effort, you can therefore find helpful resources such as white papers, for example Find out about the applications and advantages of corresponding CLM software.

Why CLM software is so beneficial

CLM systems usually offer the digitization of all contract processes, from preparation to negotiation to management of contract documents. In addition, CLM software packages usually offer the option of uploading old contracts in order to manage the inventory together with the new contracts.

Like all software systems, the introduction of a CLM system is initially accompanied by a load on internal resources. However, many software providers offer the option of setting up the processes. The initial costs and investments in new processes usually pay off within weeks.

In addition to the central storage of existing contracts, the creation of new contracts in accordance with internal requirements is an integral part of a CLM suite. This ensures that contracts always comply with compliance requirements and that only products that the company actually offers are sold.

The contracts created using CLM software automatically end up in the integrated contract management system. Risk parameters can thus be easily read out again without much effort. You can also usually easily set deadlines and appointments, such as the renewal or termination of a contract, while drafting a contract.

Compared to the options mentioned above, a CLM system is a first step more complex than the introduction of administration using Excel sheets. However, CLM systems surpass conventional administrative methodologies through better administration systems, negotiation logics and well-established processes, which, when introduced, make complex administrative processes obsolete within a short period of time.

In addition to administrative savings, the use of CLM systems also offers the opportunity to increase value, as better contracts can be agreed more quickly.