Contract management KPIs: metrics, tips, and real examples

Contract management is a complex process with many natural challenges—from time-consuming and repetitive tasks to common silos between teams, trouble closing deals, or elongated paperwork signing processes.

Now, to deal with the complexity you should start with implementing a well-thought-out strategy, which we go over in detail in this article.

A big part of laying down your strategy for managing contracts is setting the right KPIs, tracking them over time, and of course, improving based on the gathered data.

In this article, we’ll talk more about which KPIs you should track to make contract management as efficient as possible.

We’ll also touch on the best practices for tracking KPIs and provide some real-life examples of measurable contract management KPIs for success gained to give you a better idea on what to measure exactly.

Let’s get started.

Table of contents

1. 15 contract management KPIs to track with descriptions
2. 15 important contract management KPIs to track
3. Contract management KPIs: 5 best practices

15 contract management KPIs to track with descriptions

If you’re running out of time, check out our quick contract management KPI table with all the metrics explained throughout this article.

Contract management KPIs: why are they such an important tool for each team?

Now let’s turn to a detailed KPI explanation in terms of contract management, starting with the what and why.

Contract management Key Performance Indicators (KPIs) are the tool you’re going to be using to actually measure whether or not your contract management process works as you want it to.

KPIs help you find a way to track not only the successes of your business, but also failures and seek areas in need of improvement.

Different teams can track different KPIs fit with their area of expertise. For example, tracking KPIs can provide insights into contract management’s efficiency in the following areas specifically:

1. Legal teams: may track contract compliance and renewal deadlines to reduce legal risks and avoid penalties.

For example, by monitoring expiration KPIs, the legal team can prevent auto-renewals on signing no longer favorable contracts.

1. Procurement: here KPIs can also help tremendously. Procurement teams monitor vendor performance and contract fulfillment making sure cost efficiency is sustained.
   
   For example, thanks to tracking deal closing time as their KPI, the team successfully identified a supplier consistently missing SLAs and renegotiating terms.
   
   
2. Finance: can track contract value, payment terms, and missed deadlines to optimize cash flow.
   
   With the right KPIs tracked, the finance team flagged delayed payments, improving revenue recognition and forecasting as a result.
   
   
3. Sales & revenue teams: should monitor contract cycle times to close deals faster.
   
   For sales, KPIs provide a way to find crucial blockers within their workflows that slow down the time to close deals.
   
   
4. Operations & compliance: ensure regulatory adherence by tracking compliance-related KPIs.
   
   For example, the compliance team used KPIs to confirm all vendor contracts include required data privacy clauses.
   
   
5. Vendors & suppliers: gain insights into contract performance and payment timelines.
   
   For example, a vendor improved service quality by tracking performance KPIs in client contracts.

15 important contract management KPIs to track

Let’s now go over 15 crucial contract management KPIs to track to stay efficient in different areas of your workflow, starting with contract efficiency specifically.

Efficiency metrics

Starting with efficiency metrics, such as tracking the average approval turnaround time or the time it takes to complete a whole contract lifecycle.

These metrics help you track the progress and performance of your contract management operations, contract administration, and ultimately the effectiveness of your contract process as a whole.

Tracking such metrics in contract management is crucial because it directly impacts business agility, cost savings, and risk reduction.

To maximize efficiency, you can start by tracking these contract management performance metrics:

• Contract cycle time: the time it takes for a contract to be completed. From initiation to execution.
• Contract approval turnaround time: the speed of internal approvals. 
• Error rate in contracts: the frequency of mistakes that may arise during the contract requiring further revisions.

💡 See how TZMO Group—an international producer and supplier of medical, hygiene, and cosmetic products—reduced their contract processing time up to 90% with one simple solution.

TZMO implemented Autenti into their processes and streamlined and automated its document flow as a result, minimising the need for paper documents.

Why?

Because Autenti allows you to sign documents, including a variety of contracts, completely online with e-signatures—instead of relying on traditional paper signing. Now, TZMO finalizes many of its documents in just a few hours instead of weeks.

Try Autenti for free on a 14-day trial to see how e-signatures can simplify your contract management processes.

Compliance & risk metrics

Going a step further, another huge part of contract management is of course risk mitigation and compliance of contract terms with legal laws.

To make sure your business is doing well in this area, you should track a few compliance and contract risk metrics, such as the overall percentage of contracts meeting compliance requirements or the total number of breaches suffered.

Why?

Mostly to protect the business from financial and reputational damage.

By preparing the business for possible audits and monitoring contract compliance rates, organizations can identify gaps in regulatory adherence and proactively address potential violations before they escalate.

KPIs used to measure compliance and risk management are:

• Contract compliance rate: the percentage of contracts meeting legal and regulatory requirements.
• Missed obligations & penalties: the number of breaches and associated fines.
• Audit readiness score: how ready the business is to undergo an audit.

💡 Besides just monitoring missed obligations, penalties, or ensuring your contracts stay compliant, it’s best to turn to proactive risk management.

That way, you’ll turn from frantic problem solving to predicting what may cause a contract to be risky and dealing with it ahead of time.

Financial performance metrics

Although every aspect of contract management, from risk mitigation to avoid fines to faster deal closing, indirectly impacts financial performance metrics of a business, we’re now going to dive into the direct metrics that affect the finances.

We’re talking specifically about ways to maximize cost savings, optimize revenue, and prevent financial losses.

For example, by monitoring contract value realization, businesses can ensure they are capturing the full expected benefits from agreements while minimizing revenue leakage caused by poor contract enforcement.

A good way to track contract management’s financial impact is by measuring the following aspects:

• Contract value realization: the percentage of expected contract value achieved. Measure your contract management ROI, for example by tracking the annualized contract value and put it against the initial contract value assessments and final realizations.
• Cost savings from negotiations: the key performance indicator (KPI) here is the amount saved through favorable terms.
• Revenue leakage: another metric to track is the missed revenue due to poor contract management.

Supplier & vendor performance metrics

It takes two to a contract, which is why you should also track important metrics related to supplier & vendor performance, ultimately allowing you to negotiate better terms, and build a network of high-performing, trustworthy vendors that contribute to long-term success.

Because focusing solely on the internal side of things can only help so much.

For example, contract managers can monitor on-time delivery rates and SLA fulfillment, organizations can assess whether vendors meet contractual obligations and maintain service consistency.

Now the KPIs for effective contract management related specifically to business partnerships are:

• On-time delivery rate: basically vendor adherence to deadlines.
• SLA fulfillment rate: the percentage of contracts meeting service level agreements.
• Dispute frequency: the number of contract-related issues with vendors.

Customer & stakeholder satisfaction metrics

Last, but certainly not least, we’re going to go over the KPIs specific to customer and stakeholder satisfaction since they’re very much involved in the whole process and their satisfaction is crucial to successful business running.

Monitoring internal stakeholder satisfaction helps identify inefficiencies in contract processes, enabling teams to streamline workflows and improve collaboration between departments.

In turn, evaluating customer contract satisfaction ensures that agreements are clear, fair, and beneficial, reducing friction and nurturing long-term partnerships. 

For example, tracking contract renewals and retention rates provides insights into whether contracts are meeting the needs of both parties, helping businesses refine terms and enhance service quality.

Optimize contract management by tracking these customer and stakeholder satisfaction metrics:

• Internal stakeholder satisfaction: feedback from teams using the contracts.
• Customer contract satisfaction: client ratings of contract fairness and clarity.
• Renewal & retention rate: percentage of contracts renewed vs. terminated.

💡 Take a look at how Medicover—a provider of a wide range of employee benefits—increased their customer satisfaction by switching to electronic signatures with Autenti, instead of relying on lengthy traditional contract signing.

"I cannot imagine going back to the old ways, either for Medicover or for our clients. Electronic signatures have become the standard." Łukasz Żuchliński, Head of Telesales at Medicover

Contract management KPIs: 5 best practices

Knowing which metrics to track is not enough to know exactly how you can best implement contract management KPIs to follow.

So to ensure better contract management practices and track KPIs in a way to actually learn from the findings and improve your processes, consider the following tips.

Such an approach to contract management KPI tracking should give you a head start to successfully identify the successes and failures in your processes—and improve as needed.

Tracking the right KPIs helps you stay on track

As seen above, there are various KPIs for contract management, from overall contract effectiveness and contract management success to more specific issues like the exact ROI from contracts.

But if there would be one piece of advice we’d give you in terms of tracking such a complex process as contract management tends to be is to set SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals to actually reach your goals and make KPIs be a helpful tool instead of a disappointment.

Contract management has many benefits when done right, make sure you’ll find them all.