With Digital Contract Management in your property system, it becomes much easier to measure and evaluate key metrics in the financial management of your properties. In this article, we highlight a few crucial areas for follow-up, along with examples of common performance indicators.
Tracking and measurement are essential parts of contract management. Keeping control of how different premises are used, vacancy rates, contract terms, and the costs or revenues associated with various property agreements contributes to better oversight and more efficient financial management.
One major challenge for many property departments is access to real-time data. Updates and follow-ups are often done manually in Excel spreadsheets and contract documents. This time-consuming process makes it difficult to get a clear overview and limits what can be measured and when.
More and more companies are recognising the value of better, more efficient follow-up and control by digitising their contract management.
A more secure, measurable, and proactive approach to Contract Management
The two most critical parameters in contract management are dates and money, whether for leasing or letting:
- What are the start and end dates?
- Are there any changes to terms, price adjustments, or termination clauses?
- How much are we paying? What revenue can we expect – and for what?
- Today and in the future?
With an integrated contract management system, you can track specific key performance indicators (KPIs) at different levels—from individual contracts to units, spaces, or entire properties. Real-time updates and automated alerts create new opportunities for follow-up and evaluation. Notifications linked to contractual changes reduce the risk of missing important deadlines, improving long-term planning and ensuring a more secure, measurable contract management process.
Common key metrics in FM systems
Here are some examples of contract-related KPIs you can monitor and generate reports for in a property system:
Contract Control
| Total leased vs. rented-out area | Useful for budgeting and follow-up work, providing clear insights into space usage and potential leasing opportunities. |
| Which contracts are expiring or up for renegotiation – and when? | Having an overview makes planning easier and reduces the risk of missing key dates, preventing unnecessary costs. |
| Which contracts are expiring or up for renegotiation – and when? | Keeping track of price increases ensures no revenue is lost and prevents unexpected costs when leasing or renting. Automated alerts further improve contract management efficiency. |
Rent monitoring
| How do contract changes affect our costs/revenue? | Rent-related costs are one of the biggest expenses in property management. Understanding when and how different contract changes impact rental income is key for budgeting, covering rent periods, index adjustments, termination dates, and due dates. |
When should different rental agreements be invoiced/paid? | More automated follow-ups on invoicing and due dates ensure better financial planning and a more reliable liquidity overview. |
| How large are the rental costs in existing contracts, distributed across different spaces and tenants? | Allocating rental costs within a property can be challenging. With digital floor plan integration, it becomes easier to visualise and test different scenarios. This enables more accurate cost distribution and a clear picture of rental cost allocations. |
Vacancies and space utilisation
| What is the vacancy rate for a specific property or unit? | An important KPI for calculating lost rental income. It can also be used to optimise space utilisation for better cost efficiency. |
| Which contracts are linked to vacant spaces? | The rent associated with empty units is a significant financial factor. Better visibility of contract terms linked to vacancies makes occupancy planning easier and can serve as a key decision-making tool for property sales or space reallocation. |
| What costs are associated with vacant units over the contract period? | Empty properties still generate costs, including utilities and maintenance. Having all contracts stored in one place ensures better cost control and financial oversight. |
Digital Contract Management: A key to both financial and technical property management
Digitising contract management creates better conditions for efficient, transparent, and secure administration in both technical and financial property management. A property system with automated monitoring and alerts frees up valuable time for more strategic and proactive work. It also ensures that the right information is available at the right time, which is crucial for secure and efficient contract management.
How does your company manage contracts today? With Pythagoras’ all-in-one solution for tenants and landlords, contracts are seamlessly integrated with other property-related information. This makes it easy to measure and track financial performance. Read more here
