Vareto Finance Glossary

Service-Level Agreement (SLA)


A service-level agreement (SLA) is the documentation used by most technology companies to set expectations with the client/customer. This document describes various aspects of the product/ service to be delivered, contact points for end-user issues, effectiveness metrics, etc. Once an SLA is agreed upon, customers can know what to expect from the delivering company. It also covers details of remedies or penalties in case the service levels are not achieved.


The SLA should include aspects like:a. Description of the product/services b. Expected service levelsc. Metrics for delivery and quality measurementd. Duties and responsibilities of each partye. Impact of breaches and penaltyFor example, if a service level is breached since the client did not provide timely information, the company/supplier does not get penalized.

Why it matters

Some of the benefits of having an SLA in place are:1. Improved customer service2. Enhanced communication3. Negotiated and mutually accepted4. Defined procedures5. In case of a question or disagreement, the SLA acts as a written reference6. Sets customer service quality standards