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QUESTION OR PROBLEM STATEMENT
How do I calculate TCV?
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SOLUTION
TCV is a reference amount, it may not be the same as the invoice amount calculated via RBE, especially when the charge has a proration.
Here I would like to use some example to explain how TCV is calculated:
For example, if the charge is triggered on 2/27/2017, then for the charge, its start date is 02/27/2017, end date is 02/01/2018,
- interval months: 11 months.
- Partial Date = Start Date + Interval Months = 01/27/2018
- Interval Date = End Date - Partial Date = 02/01/2018 - 01/27/2018 = 5 days
- Base Days = (Start Date + Interval Months + one month) - Partial Date = 02/27/2018 - 01/27/2018 = 31 days
- TCV = MRR x ( interval Months + (Interval Date / Base Days)) = MRR * (11 + 5/31)
However, if you set the trigger date on 02/28/2017, which is a month-end, then the calculation is a little bit different:
- interval months: 11 months.
- Partial Date = Month-End + Interval Months = 01/31/2018 ( which is also a month-end) = 01/31/2018
- Interval Date = End Date - Partial Date = 02/01/2018 - 01/31/2018 = 1 day
- Base Days = (Start Date + Interval Months + one month) - Partial Date = 02/28/2018 - 01/31/2018 = 28 days
- TCV = MRR x ( interval Months + (Interval Date / Base Days)) = MRR * (11 + 1/28)
If you found my answer helpful, please give me a kudo ↑
Help others find answers faster by accepting my post as a solution √
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SOLUTION
TCV is a reference amount, it may not be the same as the invoice amount calculated via RBE, especially when the charge has a proration.
Here I would like to use some example to explain how TCV is calculated:
For example, if the charge is triggered on 2/27/2017, then for the charge, its start date is 02/27/2017, end date is 02/01/2018,
- interval months: 11 months.
- Partial Date = Start Date + Interval Months = 01/27/2018
- Interval Date = End Date - Partial Date = 02/01/2018 - 01/27/2018 = 5 days
- Base Days = (Start Date + Interval Months + one month) - Partial Date = 02/27/2018 - 01/27/2018 = 31 days
- TCV = MRR x ( interval Months + (Interval Date / Base Days)) = MRR * (11 + 5/31)
However, if you set the trigger date on 02/28/2017, which is a month-end, then the calculation is a little bit different:
- interval months: 11 months.
- Partial Date = Month-End + Interval Months = 01/31/2018 ( which is also a month-end) = 01/31/2018
- Interval Date = End Date - Partial Date = 02/01/2018 - 01/31/2018 = 1 day
- Base Days = (Start Date + Interval Months + one month) - Partial Date = 02/28/2018 - 01/31/2018 = 28 days
- TCV = MRR x ( interval Months + (Interval Date / Base Days)) = MRR * (11 + 1/28)
If you found my answer helpful, please give me a kudo ↑
Help others find answers faster by accepting my post as a solution √