Easily accessing the right information at the right time is crucial for proactively managing and steering contract management for your properties. Here are some examples of tracking metrics that provide a clear overview and serve as a foundation for analysis and control, for both tenants and landlords.
Efficient reporting and tracking of contract management based on real-time data make it possible to identify risks, cost deviations, and future needs early. With regular and strategic reports, management, the finance department, and controllers are better equipped to foresee challenges and make well-informed decisions. This can result in significant cost savings and efficiency improvements.
Below are examples of reporting areas and data points that provide comprehensive control of the contracts tied to your properties, which can be tracked using Pythagoras:
Contract overview
A complete view of all current contracts within the property portfolio, including contract periods with start and end dates, costs, and responsible parties. This helps management and the finance department identify the duration of various contractual obligations. With a good contract overview, you can work more strategically and make better-informed decisions. It enhances planning, monitoring, and foresight, such as when contracts need to be renewed or renegotiated. It also reduces the risk of unexpected costs if important dates or terms are missed.
Cost analysis
Displays total contract costs per property, broken down by areas, tenants, or categories such as service, maintenance, security, or cleaning. It provides a clear picture of how rental costs and revenues are distributed. This makes it easier to compare costs between properties, identify areas for cost savings, and ensure that budgets are adhered to.
Budget and forecast
Facilitates the reconciliation of budgeted costs against actual outcomes. The information can be used to calculate various scenarios based on hypothetical index adjustments and prices for different areas in the short or long term. Other parameters, such as adjustment dates (costs and/or revenues), additional charges, discounts, etc., can also be factored in. This report is useful for ensuring that costs remain within budget. Identifying budget deviations early allows for more proactive action, which strengthens financial control over property costs and revenues.
Risk management and tracking
This is a critical, preventative part of contract management to maintain good preparedness and assess the risks within the contract portfolio. A common example of risk reporting in contract management is the Liability Report. This report is used to calculate the “minimum lease liability,” i.e., the remaining amount that must be paid upon the termination of a specific contract. It serves as a basis for further processing and reporting under IFRS 16 in cases of termination. It can also provide guidance on whether it is worth exiting a contract early. Additionally, it can track other potential associated costs linked to the contract.
Reducing a company’s exposure to contract risks is often of particular interest for businesses with large spaces, such as industrial properties, where significant costs are tied up.
Property utilization
For tracking the usage and occupancy rates of different properties or spaces, linked to contracts, operations, and maintenance. Continuously monitoring how different areas are utilized in relation to contracts enables better decision-making to optimize property usage based on actual use of the spaces. With the right information, it is possible to improve space optimization and cost allocation, as well as to identify potential vacancies. This is particularly relevant for manufacturing companies with many different types of operational areas, properties, spaces, and contracts to manage.
In Pythagoras, space optimization and cost allocation are facilitated by the visual interface, linked to drawings and digital twins.
What reports do you use to manage and track Contract Management in your company?
With Pythagoras’ comprehensive solution, contracts are seamlessly integrated with all related property information, enhancing management and decision-making capabilities.
