Committed spend
Committed spend is what you are contractually bound to pay vendors, whether or not you keep using what you bought.
Why it matters to a budget owner
It is the starting point for next year's budget. Add up the fees you owe under signed contracts, keep fixed fees apart from usage and per-seat costs, and keep currencies apart.
Count each commitment once. A master services agreement commits nothing on its own; the statements of work beneath it carry the money.
What to record
- Each commitment's amount and currency
- Whether it is fixed or variable
- The period it covers
Frequently asked questions
Is committed spend the same as last year's invoices?
No. Invoices show what you paid; committed spend shows what you owe going forward, including ramps and price changes already agreed.
General working knowledge about commercial contracts, not legal advice. Your own agreement governs.
Glossary
Look up related terms
- Minimum commitmentA minimum commitment is the least you agree to pay or use over a period, whatever your actual usage turns out to be.
- Annual contract value (ACV)Annual contract value is a contract's average yearly value: the total contract value divided by the number of years.