For many corporate real estate departments, Microsoft Excel is the go-to tool for lease administration. After all, just about every business computer has it, it's good at storing and presenting information, and everyone knows how to use it. However, Excel isn't designed for lease administration. Here's why:
Forgetting to check the spreadsheet
One of the most important parts of lease administration is critical date management. Most leases have certain dates that must be met and if your business misses them, you could end up losing important rights or be subject to higher rents. Excel lets you enter the dates, but if you don't check the spreadsheet and see which ones are coming up, they're easy to miss.
Data entry error
It's easy and fast to enter data into Excel. It's also just as easy to enter the wrong data. Since Excel has no intelligence of its own or understanding of what you're entering, it also doesn't have any functions built in to help check what you're entering or to compare it with entries that you made in other fields. If you make a mistake, you'll have to catch it yourself.
Lack of supporting information
Excel spreadsheets generally stand on their own. If you need to double check something, you'll need to switch out of Excel and pull up the document. Lease administration software frequently has a native document storage function that lets you look at important lease paperwork right while you're in the software.
Misreading of the lease
Accountants and computer programmers talk about the danger of "garbage in, garbage out," meaning that the data you get out of a system is only as good as what you put into it. It's possible to misread the lease in any system. And because Excel offers no help or guidance with the abstracting process and doesn't keep a copy of the lease for you, it's more likely to create errors that you won't spot.
Important term hidden in "Notes"
Your Excel spreadsheets are only as good as the columns that you set up to store data. Invariably, you have to make a compromise between the physical size of your spreadsheet and the amount of data you store. This usually puts you in the position of putting lease administration data in a catch-all "Notes" column. Sometimes, important data in that column ends up getting overlooked.
"Too many cooks"
While Microsoft touts the ability to use Office applications collaboratively, at its core Excel is a single-user application. While it's possible for many people to use the same spreadsheet without ever having trouble, it's equally possible that while one member of your lease administration team is making his own changes, someone else is making her own. If these changes don't get merged into a single, canonical document, you could end up with several versions of slightly different spreadsheets.
Limited Import Functionality
If you have outside data that you want to include in your lease administration system, many software programs can accommodate it. Some can even automatically import data from outside sources or have market data entered by a vendor. With an Excel spreadsheet, the only data you have is the data that you enter.