Service Level Agreement (SLA)

What is a Service Level Agreement? (SLA)

A Service Level Agreement is a formal contract defining the expected level of service between a provider and customer, specifying performance metrics, responsibilities, and remedies for non-compliance.

SLAs establish measurable standards for service quality, availability, response times, resolution times, and support hours. Common metrics include uptime percentages, response timeframes for different priority levels, and performance benchmarks.

For software vendors serving accounting and HR functions, SLAs provide transparency, accountability, and recourse if standards aren’t met. SLAs align expectations, enable performance monitoring, provide frameworks for continuous improvement, and protect customer interests. Clear SLAs are essential for vendor relationships, ensuring service reliability and defining consequences for service failures.