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Zuora Staff

TCV CALCULATION

QUESTION OR PROBLEM STATEMENT:

Hi,

We are seeing an issue where the TCV value on the RatePlanCharge object does not match what we expect.

 

Here's an example to illustrate the issue.  We have subscription Sub-XYZ, this subscription includes a prorated charge that should have a TCV of $853.33.

 

When invoiced, you will see that the subscription mentioned earlier has 3 invoice items spanning the service period 03/15/2015 to 05/31/2015. These invoice items total $253.33. For the rest of the term, 06/01/2015 to 11/30/2015, there should be a bill for $600, which would give us a total TCV of $853.33. So everything behaves as expected on the invoice side.

 

However, when we make an export on the rate plan charge for the given subscription, we see that the TCV doesn't show the correct prorated value.

 

We would like to know if there is an issue with the TCV calculation on the RatePlanCharge object. If no, why is there a mismatch between the total amount to be invoiced and the TCV? If yes, is there any plan to fix this?

 

Please let us know.



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4 REPLIES 4
Zuora Staff

Re: TCV CALCULATION

SOLUTION:

TCV is calculated based on the charge's trigger day, while the invoice items are calculated based on the charge's billing day. The tenant settings only affect how invoices are generated and not TCV calculation.

 

Example:

Subscription start day is 11/30/2015 for an initial term of 12 months, with billing day of EOM.  Rate plan charge service activation is set 03/15/2016, so the first month bills from 03/15/2016 - 03/30/2016, and full monthly after charges after that (03/31/2016 - 04/29/2016, 04/30/2016 - 05/30/2016, etc.)

TCV takes effect on 03/15/2016 and is calculated as follows:

  • 03/15/2016 - 04/14/2016
  • 04/15/2016 - 05/14/2016
  • 05/15/2016 - 06/14/2016
  • 06/15/2016 - 07/14/2016
  • 07/15/2016 - 08/14/2016
  • 08/15/2016 - 09/14/2016
  • 09/15/2016 - 10/14/2016
  • 10/15/2016 - 11/14/2016
  • 10/15/2016 - 11/29/2016 (Prorated)

IMPORTANT CONSIDERATIONS:

Calculation above is based on specific Z-Billing Settings > Define Billing Rulesconfiguration.  As you change the settings, billing calculations will adjust accordingly.

SUPPORTING REFERENCES:

Total Contract Value

Proration

Define Billing Rules

Timing and Frequency of Charges



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Savvy Scholar

Re: TCV CALCULATION

The Total Contract Value (TCV) must represent the total value of the contract just like the total billings (sum of all invoices) should equal the total value of the contract. It is illogical for them to be different. I wonder if others are able to use the Zuora TCV when analyzing upticks and downticks even though the values don't represent the totals invoiced to the customer? What value does Zuora's TCV have if it does not reflect actuals?

Tags (2)
Zuora Staff

Re: TCV CALCULATION

Hello,

 

Do you have an example that you can private message me so I can review your data?

 

Thank you,

Monique



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Savvy Scholar

Re: TCV CALCULATION

Hi Monique,

 

We can work through the ticket we have open. Thanks, Jennie