Adding budgeted costs for SaaS contracts

Break the contract down into its individual cost items so that you know the total cost of the contract and the cost of the contract for each user.

The max number of budgeted line items that you can add is 50.

The max number of line items for variable tiered type costs that you can add is 10.

If you need to add more, contact your Customer Success Manager.

Procedure

From the menu, click Contracts.
Click a record.
Click Budgeted Costs.
Click Add.
Enter the individual cost items that make up the cost of the contract.
Save the contract.

Reference information

To add the budgeted line items, review the definitions for the following fields:

Start Date and End Date

The start date is the date that the contract is activated. The start and end dates are prepopulated with the values that are entered when you create the contract on the Information page.

Type

To differentiate the type of costs and how they’re calculated for each item.

One time

To capture the costs of a service that you are unlikely to use again.

Fixed

To capture the cost, for example, of the initial setup.

Alternatively, you can use the fixed cost type for a variable cost. Let’s Say you have purchased a SaaS license for cloud storage. One terabyte (TB) costs $100 per year, 2 TBs costs $150 per year, and so on. Based on your current storage usage and growth forecasts, you know that you will use about 0.5 TB of cloud storage. You don’t get a rebate for using less storage, so you add $100 as a fixed instead of a variable cost for the current year.

Variable

For example, You want to capture the minimum cost of a payment that might change such as the cost of SaaS subscriptions. In this case, you want to know that, unlike fixed or one-time costs, the cost of variable line items can change and might result in an underestimation of the actual cost.

Variable (tiered)

For licenses with tiered cost rates such as licenses with variable rates based on the number of users or based on usage. In this case, you want to itemize the costs so that you can estimate the maximum cost of the line item and its potential impact on your budget.

Let’s say you pay for a messaging service that charges different rates based on the number of messages that are sent every month. For example, you’re charged 0.00 for the first 10,000 messages, 0.01 for 10,001 to 20,000 messages, and 0.03 for 20,001 to 30,000 messages. Based on historical usage and forecasts, you use the messaging service to send about 35,000 messages every month. To budget the costs, you create a line item with the cost type Variable (tiered), and break down the costs into three line items.

Variable tiered line items

Current Year Contract Cost

The total cost of the contract for the current year in the currency that was used to record the costs and in the company currency.

Total Contract Cost

The total cost of the contract year in the currency that was used to record the costs and in the company currency.

Discount

Apply the discount so the cost reduction is calculated for each user.

Metrics

You can tag the types of metrics for variables and variable (tiered) costs. By default, the following tags can be selected:

# API Calls
# Assets
# Emails Sent
Storage
# Users

Number of payments and terms

To calculate the annual cost and the total cost of the contract, you enter the number of payments and the term. Let's say, you pay once a month. Then you enter 1 in the # payments field and you select Month(s) from the list of terms.