Total contract value (TCV)
Also called TCV
Total contract value is everything a contract commits you to pay over its full term, including one-off and recurring fees.
Why it matters to a budget owner
TCV answers how much you have signed up for in total. It includes set-up fees and every year of a multi-year term.
Compare TCV with the cost of leaving early to see what a long commitment really locks in.
What to record
- Recurring fees for each year
- One-off fees
- The term length
Frequently asked questions
Does TCV include usage fees?
Only the committed part. Usage beyond a commitment cannot be known in advance, so keep it out of TCV and estimate it separately.
General working knowledge about commercial contracts, not legal advice. Your own agreement governs.
Glossary
Look up related terms
- Annual contract value (ACV)Annual contract value is a contract's average yearly value: the total contract value divided by the number of years.
- Early termination feeAn early termination fee is what you pay to end a contract before its term is over, often a share of the remaining fees.