A lot of software companies struggle with estimating their budget, especially their annual contract value (ACV). That's where our software contract value calculator steps in, helping you calculate your annual and total contract value in no time at all. With just a few clicks, you will know how much money you will make on every contract!
What data do I need?
To calculate the contract value, you will need to provide the following data:
- Retail price: the regular monthly price of one subscription for one user.
- Seats: number of users who will be paying for access to the software.
- Discount: perhaps you want to give your customers a discount if they buy a package of 10 seats or more? Enter the percentage discount in this field or switch to the
advanced modefor a fixed discount, like $50.
- Contract duration: for how long will the customer pay the monthly subscription cost - a month, half a year, a few years?
What do the results mean?
- Discounted price: this is the monthly price of one subscription for one user after the discount - make sure to take a look at it.
- Monthly cost: it's calculated as the discounted price multiplied by the number of seats. It is the amount of money you'll receive each month.
- Annual cost: this is the annual contract value. This is the amount of money you will make each year on this customer's subscription.
- Contract value: this is the TCV, or total contract value. It's the total that you will make considering the contracts duration - if the contract exceeds a year, it will be higher than the ACV.
If you would like to analyze the marketing aspect of your business, try the online marketing conversion calculator.