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TCV calculation

QUESTION OR PROBLEM STATEMENT

How do I calculate TCV?

 

 



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Re: TCV calculation

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, 

  1. interval months: 11 months.
  2. Partial Date = Start Date + Interval Months = 01/27/2018
  3. Interval Date = End Date - Partial Date = 02/01/2018 - 01/27/2018 = 5 days
  4. Base Days = (Start Date + Interval Months + one month) - Partial Date = 02/27/2018 - 01/27/2018 = 31 days
  5. 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:

  1. interval months: 11 months.
  2. Partial Date = Month-End + Interval Months = 01/31/2018 ( which is also a month-end) = 01/31/2018
  3. Interval Date = End Date - Partial Date = 02/01/2018 - 01/31/2018 = 1 day
  4. Base Days = (Start Date + Interval Months + one month) - Partial Date = 02/28/2018 - 01/31/2018 = 28 days
  5. TCV = MRR x ( interval Months + (Interval Date / Base Days)) = MRR * (11 + 1/28)


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