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Knowledge Center > Subscription Management > Customer Accounts > Manage Customer Accounts > Key Metrics for Customer Accounts > Total Contract Value

Total Contract Value

Total Contract Value (TCV) is a metric that represents the value of one-time and recurring charges. It does not include usage charges. TCV is a projection of your booking revenue and can be useful when planning expenditure and managing the growth of your business. See Exporting TCV data for analysis for more information.

TCV is the measure of the value a customer has committed to you in contracts or orders. It does not match the total invoice amounts that are billed for charges over the subscription term. 

How TCV is Calculated?

Zuora calculates TCV for every charge segment, and rolled up through the charge, subscription, and account.

TCV of Rate Plan Charges

Zuora calculates TCV for one-time and recurring rate plan charges.

TCV of One-Time Rate Plan Charges

TCV of one-time charges are calculated based on the term setting:

  • If the subscription does not expire (an Evergreen subscription), TCV is null.
  • If the subscription expires after a period (a Termed subscription), TCV is the full value of the charge. For example, you provide a one-time charge with $10 flat fee. TCV is $10. 
    Note that TCV is 0 if charges are generated from prepayment.

TCV of Recurring Rate Plan Charges

TCV of recurring charges are calculated based on the term setting:

  • If the subscription does not expire (an Evergreen subscription), TCV is null.
  • If the subscription expires after a period (a Termed subscription), TCV is the value of the segment for the full period from the start date to end date. TCV is calculated based on the billing period:
Weekly Based Billing Period 

Follow the formula below to calculate TCV values of recurring charges:

TCV = (Price/Number_of_Days_of_Base_Price) * (Charge_Effective_End_Date Charge_Effective_Start_Date)

For example: A recurring rate plan

  • Charge Model: Flat Fee Pricing
  • Price: $140
  • ListPriceBase: Week
  • Billing Period: Week
  • Charge Effective Start Date: January 1
  • Charge Effective End Date: January 20

TCV = ($140/7)*19 = $380

Monthly Based Billing Period

TCV of a recurring charge equals to the Monthly Recurring Revenue (MRR) multiplied by the number of months that the charge is effective.

Follow the formula below to calculate TCV values of recurring charges. Note that the TCV value may include proration if the charge period includes a partial month at the end. Zuora uses the actual number of days in the month for proration.

TCV = MRR * (Charge_Effective_End_Date Charge_Effective_Start_Date)

Example 1:  A recurring rate plan with full month period

  • Charge Model: Flat Fee Pricing
  • MRR: $100
  • ListPriceBase: Month
  • Billing Period: Month
  • Charge Effective Start Date: January 1
  • Charge Effective End Date: March 1

Charge effective period: 2 months (= 03/01 - 01/01)

TCV = MRR * 2 = $200

Example 2A recurring rate plan with partial month period

  • Charge Model: Per Unit Pricing
  • MRR: $100
  • ListPriceBase: Month
  • Billing Period: Month
  • Charge Effective Start Date: January 1
  • Charge Effective End Date: March 15

Charge effective period: 2.4516129032258065 months (= full months+partial months=2+(15-1)/31)

TCV = MRR * 2.4516129032258065 = $245.16129032258065

Full-term Based Billing Period

If you select Subscription Term as the billing period, TCV of recurring charge is calculated based on the list price base:

TCV of Subscriptions

Every one-time charge and recurring charge in a subscription has an associated TCV value:

  • For a one-time charge the TCV is the value of the individual charge.
  • For a recurring charge, the TCV is the sum of all the charges that a customer pays over the charge effective period. The charge effective period is from the date the subscription started until the end of the current term.

TCV of Customers

The TCV value of an account is the sum of TCV values of all its subscriptions that are not in draft status. 

TCV After Subscription Amendments

TCV are automatically recalculated if amendments are made to the charge during its life cycle. If an amendment to a recurring charge is made then the charge is split into sections defined by effective start date and effective end date. Each section has a different TCV. For example, if a customer upgrades to a more expensive product partway through the subscription, the TCVs of the modified recurring charge, the subscription, and the customer increase.

Where can I find TCV?

TCV values are automatically calculated by the system and displayed in the Zuora UI, REST API, and SOAP API.

TCV of a charge

In the Zuora UI, you can find TCV values for individual charges in a subscription in the following way:

  1. Navigate to Customers > Subscriptions in the left-hand navigation section.
  2. Click the name of the desired subscription (or the View link) to enter the detailed subscription view
  3. At the bottom of the page in the Product & Charges section select View by Key Statistics in the drop-down box. TCV values for each one-time and recurring charge will be displayed in the table below.

File:CA_Billing/A_Customer_Accounts/A_How_to_Manage_Customer_Accounts/E_Key_Metrics/B_Total_Contract_Value/Charge_TCV_UI.jpg

For more information on how these TCV values are comprised, hover your mouse over the green icon in the history column of the table. A popup window will appear showing the MRR and TCV for each section of the charge.

In the Zuora REST API, use the tcv field in the Get subscriptions by key or Get subscriptions by account method.

In the Zuora SOAP API, use the TCV field on the RatePlanCharge object.

TCV of a subscription

You can find the TCV value for each subscription in the Zuora REST API, use the totalContractedValue field in the Get subscriptions by key or Get subscriptions by account method.

TCV of a customer

In the Zuora UI, navigate to Customers > Customer Accounts in the left-hand navigation section, and select a customer. In the detailed view that appears, scroll to the Subscriptions & Amendments section, and view the Total TCV value in the Subscriptions-Owned tab.

Total_TCV.jpg

Last modified
17:40, 7 Feb 2017

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