# Quote Metrics Calculation Use Cases

This article contains examples of how Zuora calculates quote metrics for the new subscription and amendment quotes.

The Sub-Total (Total - Discount - Tax) of a quote is the invoice amount, and it is calculated based on the following:

The TCV of a quote is calculated solely based on the MRR. The settings above do not affect TCV calculation.

## Quote Metrics Calculation Use Case for New Subscription Quote

In the two use cases for New Subscription quotes, the settings are configured as below.

• Billing Day of the rate plan charge: Default from Customer Account
• Bill Cycle Day of the quote: 1st of the month
• Billing Period Alignment of the rate plan charge: Align to Charge
• When prorating a month, assume 30 days in a month or use actual days: Use actual number of days'
• When prorating periods greater than a month, prorate by month first, or by day: Prorate by day

### Use Case #1 for New Subscription Quote

A quote is created with the following values.

• Start Date: 10/31/2016
• Initial Term: 12 months
• Charge Model of the rate plan charge: Flat Fee
• Billing Period of the rate plan charge: Month
• Amount of the rate plan charge: 999.4585400

The quote produces the following quote metrics.

• Sub-Total: 11,993.52
• MRR: 999.4585400
• TCV: 11,993.50

In this use case, the subscription term is 10/31/2016 - 10/30/2017, and Sub-Total and TCV are different by 2 cents

The Sub-Total and TCV are calculated as below.

• Sub-Total (ie., invoice amount) is the total of the billing periods.
• Billing Period: 10/31/2016

Since the account's bill cycle day is set to 1st of the month, 10/31/2016 would fall into the month of 10/01/2016 to 10/31/2016.

The invoice amount for 10/31/2016 = 999.4585400 / 31 days = 32.24

• 11 Billing Periods: 11/01/2016 - 9/30/2017

The invoice amount for each billing period = 99.4585400 * 1 month = 999.46

• Billing Period: 10/01/2017 - 10/30/2017

Since the account's bill cycle day is set to 1st of the month, 10/01/2017 - 10/30/2017 would fall into the month of 10/01/2017 - 10/31/2017.

The invoice amount for 10/01/2017 - 10/30/2017 = 999.4585400 / 31 days * 30 days = 967.22

• Sub-Total = 32.24 + 999.46 * 11 + 967.22 = 11,993.52
• TCV is calculated based on the MRR and the subscription term.

TCV =  MRR * subscription term = 999.4585400 * 12 months = 11,993.50

### Use Case #2 for New Subscription Quote

The four settings are set as the following.

• Billing Day of the rate plan charge: Default from Customer Account
• Bill Cycle Day of the quote: 1st of the month
• Billing Period Alignment of the rate plan charge: Align to Charge
• When prorating a month, assume 30 days in a month or use actual days: Assume 30 days in a month
• When prorating periods greater than a month, prorate by month first, or by day: Prorate by month first

A quote is created with the following values.

• Start Date: 10/31/2016
• Initial Term: 12 months
• Charge Model of the rate plan charge: Flat Fee
• Billing Period of the rate plan charge: Month
• Amount of the rate plan charge: 999.4585400

The quote produces the following quote metrics.

• Sub-Total: 12.026.84
• MRR: 999.4585400
• TCV: 11,993.50

In this use case, the subscription term is 10/31/2016 - 10/30/2017, and the Sub-Total and TCV are different by 33.34

The Sub-Total and TCV are calculated as below.

• Sub-Total (ie., invoice amount) is the total of the billing periods.
• Billing Period: 10/31/2016

Since the assumption is 30 days per month, the invoice amount for 10/31/2016 = 999.4585400 / 30 days = 33.32

• 11 Billing Periods: 11/01/2016 - 09/30/2017

The invoice amount for each billing period = would be 999.4585400 * 1 month = 999.46

• Billing Period: 10/01/2017 - 10/30/2017

Since the assumption is 30 days per month, the invoice amount for 10/01/2017 - 10/30/2017 = 999.4585400 / 30 days * 30 days = 999.46

• Sub-Total = 33.32 + 999.46 * 11 + 999.46 = 12,026.84
• TCV is calculated based on the MRR and the subscription term.

TCV =  MRR * subscription term = 999.4585400 * 12 months = 11,993.50

## Quote Metrics Calculation Use Case for Amendment Quotes

The settings are configured as below.

• Billing Day of the rate plan charge: Default from Customer Account
• Bill Cycle Day of the quote: 13th of the month
• Billing Period Alignment of the rate plan charge: Align to Charge
• When prorating a month, assume 30 days in a month or use actual days: Use actual number of days
• When prorating periods greater than a month, prorate by month first, or by day: Prorate by day

The existing subscription has the following values.

• Start Date: 03/13/2016
• Initial Term: 12 months
• Charge Model of the rate plan charge: Per Unit Pricing
• Billing Period of the rate plan charge: Month
• Billing Period Alignment of the rate plan charge: Align to Charge
• Unit Price of the rate plan charge: 1.00
• Quantity of the rate plan charge: 75
• Invoiced for 03/13/2016 to 03/12/2017 for \$900

The amendment quote makes these changes.

• Start Date: 10/26/2016
• Quantity: 76

The quote produces the following metrics.

• Sub-Total: 4.60
• Delta MRR: 1.00
• Delta TCV: 1.17

The Sub-Total and TCV are calculated as below.

• Sub-Total (ie., invoice amount) is the total of the billing periods.
• Billing Period: 10/26/2016 – 11/12/2016
• Proration credit for the old 75 quantity = -(1.00 * 75) / 31 days * 18 days = -43.5
• Prorated amount for the new 76 quantity = (1.00 * 76) / 31 days * 18 days = 44.13
• Billing Period: 11/13/2016 – 03/12/2017
• Proration credit for the old 75 quantity = -(1.00 * 75) * 4 months = -300
• Amount for the new 76 quantity = (1.00 * 76) * 4 months = 304
• Sub-Total = -43.55 + (-300) + 44.13 + 304 = 4.58
• Delta TCV is calculated based on the Delta MRR and the remaining of subscription term.
1. Prior to the Update amendment, the charge properties are:
• Effective Period: 03/13/2016 - 03/12/2017
• Unit Price: 1.00
• Quantity: 75
• MRR = 1.00 * 75 = 75.00
• TCV = 75.00 * 12 months = 900
2. After the amendment made on 10/26/2016, the charge properties are:
• First segment: 03/13/2016 - 10/25/2016 (which is 7 months and 13 days)
• Unit Price: 1.00
• Quantity: 75
• MRR = 1.00 * 75 = 75.00
• TCV = (75.00 * 7 months) + (75.00 / 31 days * 13 days) = 556.4516129
• Second segment: 10/26/2016 - 03/12/2017 (which is 4 months and 15 days
• Unit Price: 1.00
• Quantity: 76
• MRR = 1.00 * 76 = 76.00
• TCV = (76.00 * 4 months) + (76.00 / 28 days * 15 days) = 344.7142857
3. Delta TCV = New TCV - Old TCV = (556.4516129 + 344.7142857) – 900 = 1.17