Cost shape and forecasting
Cost categories in vendor spend
A cost category describes what is being bought: a software subscription, professional services, infrastructure, hardware, support and maintenance, training, or a licence. The same vendor commonly sells several of these under different terms, so treating a vendor as having one cost shape misrepresents both what is committed and what can be stopped.
The Vendor Squeezer team. Last reviewed 2026-08-08. General guidance on contract structures, not legal advice, and not a statement about any particular vendor's terms.
One vendor, several kinds of spend
A vendor that sells a platform frequently also sells the implementation work, the training, and an ongoing support arrangement. Those are usually charged on different models, run for different terms, and can be exited independently. Rolling them into a single vendor figure hides all three differences.
The practical consequence appears at renewal. The subscription may renew automatically while the services engagement ends on delivery, so the decision points are not the same date and the amounts at stake are not the same money.
The common categories
The list is short and stable, which makes it useful as a field rather than a free text note.
| Category | Typical charging | Typical term shape |
|---|---|---|
| Software subscription | Fixed or per seat, recurring | Fixed term or rolling |
| Professional services | Time and materials, or milestone | Ends on delivery |
| Infrastructure | Usage based | Often evergreen |
| Hardware | One off, sometimes financed | Purchase, with separate support |
| Support and maintenance | Fixed, recurring | Annual, often renewing |
| Training | Per session or per person | One off |
| Licence | One off or annual | Perpetual or term |
Why the category changes the question
What you ask about a subscription is whether the quantity matches use and when notice is due. What you ask about a services engagement is whether the scope is complete and what the change order history looks like. Same vendor, different questions, and only the category tells you which one to ask.
Questions to ask about your own agreement
- 1.What is this vendor actually selling us, and is it more than one thing?
- 2.Is each category on its own agreement, or bundled into one document?
- 3.Do the categories have different end dates and different notice requirements?
- 4.Which parts can be stopped independently of the others?
- 5.Is any part of this a one-off charge sitting inside a recurring total?
Common questions
Should each category be a separate contract record?
Where they are separately committed, separately priced, or separately terminable, yes. The test is whether a decision about one would be a decision about the other. If not, they are two records linked to the same vendor.
Does this matter for a small vendor?
Less, but the check is cheap. The case it catches is the one where an implementation fee has quietly become an annual line, which is easy to miss when everything from a vendor is summed into one figure.
Put this against your own vendors
Record the term, the notice deadline, and the exit cost against the vendor once, and the next renewal review starts from an answer instead of a search. Free while in early access.