Contract Monitoring Checklist: 17 Items to Reduce Legal and Financial Risk

A comprehensive 17-point contract monitoring checklist to help businesses track obligations, prevent legal disputes, ensure timely payments, and avoid non-compliance. Practical guidance for any organization.

Why Use a Contract Monitoring Checklist?

A missed renewal deadline can result in an expired contract. A poorly tracked obligation can lead to vendor non-compliance — costing your business millions over time.

Contracts are supposed to be assets. But without proper oversight, they become liabilities. From unmet obligations and payment delays to silent legal breaches, risks often go unnoticed until it's too late.

This checklist helps you:

• Monitor obligations, SLAs, and compliance terms

• Track financial terms, payments, and penalties

• Identify risks before they escalate

• Proactively renew, terminate, or amend contracts

Contract Monitoring Checklist: 17 Key Elements to Track

1. Deliverables

• Are all tasks completed on time and at the agreed quality?

• Is there clear evidence of acceptance or completion?

2. Timelines & Milestones

• Are deadlines being met?

• Are there early warnings for delays?

3. Payment Schedule

• Are invoices submitted and processed on time?

• Any recurring delays or discrepancies?

4. Service Level Agreements (SLAs)

• Are SLAs being fulfilled?

• Are KPIs being tracked regularly?

5. Legal Compliance

• Does the contract comply with current laws?

• Is it updated when regulations change?

6. Internal Policies

• Are terms aligned with internal procedures and workflows?

7. Data Protection

• Is sensitive information securely stored and handled?

8. Budget & Cost Control

• Is the contract staying within budget?

• Are there alerts for abnormal cost increases?

9. Invoice Accuracy

• Are invoice amounts correct?

• Are errors being addressed promptly?

10. Payment Terms

• Are terms being followed?

• Are penalties enforced for late payments?

11. Potential Risks

• Are risks documented and reviewed?

• Are mitigation plans in place?

12. Contingency Planning

• Is there a fallback plan in case of disputes or failures?

13. Periodic Reporting

• Are vendors submitting timely and complete reports?

14. Issue Resolution

• Is there a clear escalation and resolution process?

15. Contract Amendments

• Are changes properly documented and approved?

16. Communication Records

• Are all emails and meeting notes archived?

17. Performance Data

• Are supplier ratings and contract outcomes tracked?

5 Steps to Implement a Contract Monitoring Checklist

1. Centralize Contract Storage
Use a CLM system like Kyta to store, search, and secure all contracts in one place — no more scattered files in emails or folders.

2. Assign Contract Owners
Designate a point person for each contract or contract type — often from legal, procurement, or finance. Set up workflows to handle exceptions or escalations.

3. Conduct Regular Reviews (Quarterly/Bi-Annual)
Assess obligations, SLA performance, and financials using this checklist. Adjust terms or follow-up actions as needed.

4. Set Up Automated Alerts
Don’t rely on manual reminders. Use software to send notifications for renewals, payment dates, or performance checks.

5. Maintain an Audit Trail
Log every change, comment, draft, and email. This protects your organization during audits, disputes, or compliance reviews.

Frequently Asked Questions (FAQs)

1. Do I need a checklist if I already use contract templates?
Yes. Templates help during drafting. Checklists help during execution. Most risks occur after the contract is signed.

2. Which tools help monitor contract checklists?
CLM software like Kyta Platform lets you create checklists, automate alerts, and maintain a full contract history.

3. Is this checklist useful for small businesses?
Absolutely. The fewer people involved, the more critical it is to have clear processes. A checklist reduces human error and memory reliance.

4. Should I keep logs even if there’s no dispute?
Yes. Audit logs are a preventive measure. If you're ever audited, challenged legally, or need to prove compliance — they’re your best defense.

5. How often should I review contracts?
It depends.

• Long-term contracts: review quarterly

• Short-term contracts: review once or twice before expiry

• Time-sensitive terms (e.g., payments): monitor frequently via alerts