TCV or TCB - what is the difference and which metric should I use for my subscription business?
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TCV or Total Contracted Value is a projection of your booking revenue and is helpful when planning for a budget to grow your business. TCV is calculated over a certain period of time (e.g. 3 years) from the one-time (e.g. $1000) and recurring charges (e.g. $15,000 annually). TCV does not include usage charges. In this example, your TCV over three years would be $1000 + ($15,000 * 3) = $46,000. TCV may not match the total invoice amounts that are billed for charges over the subscription term.
With the launch of Zuora Order Metrics, a new metric for subscription businesses is TCB (Total Contracted Billing TCB). TCB gives you the amount that has been/will be invoiced over the subscription term of a customer. TCB is available when you enable Order Metrics in your tenant. Create a support ticket to enable Order Metrics after reviewing the known limitations this knowledge center article.
Once Order Metrics has been enabled in your tenant, you can quickly check by going to Reporting >> Data Sources and searching for Orders. You will see these additional data sources: Order, Order Action, Order MRR, Order Quantity, Order TCB, Order TCV. In order to create a TCB report, goto Reporting >> Create New Report >> Select Data Source: Order Tcb and run a detail report with the following selected fields: