Monitoring contract

Definition

The agreement to watch a building's alarm signals, billed monthly and separate from inspection work.

Why It Matters

Monitoring is the highest-quality revenue in the trade because it recurs without a truck rolling, and many small companies resell somebody else's central station on a thin margin while the customer thinks the contract is theirs. Ask who holds the monitoring agreements, what the wholesale cost per account is, and whether the accounts are assignable at all. A book where the central station owns the customer relationship is worth a fraction of one where the company does, and no income statement shows the difference.