Because the overall value of the order reflects real bookings rather than predictions, it shows how a company grows and more accurately predicts revenue, which helps you optimize your sales and marketing efforts. The total contractual value of a customer is the dollar value it brings to your business over the time that its contract involves. Don`t forget here that you can`t describe month-to-month contracts as “infinite” contractual values. It`s a bit ridiculous when you write it like that, but a surprising number of people think of recurring contracts, as if they were forever. The total value of the contract only lasts until the renewal date arrives. No single metric can serve as a perfect indicator of the health of the company. The world of SaaS has companies with a surprisingly low average customer value over the duration of their contracts, and yet these can be some of the fastest growing companies. For this reason, the only way to integrate multi-year TCV calculations is to process only prepaid offers. This value promised by the contract can only be counted when it is in your hands. Under legislation that requires a single requirement, which can be subdivided into several stages, or a series of similar or identical requirements, the total value must be taken into account in assessing the application of the legislation. Specific rules have been established for each type of market and it is stressed that it is not appropriate to break down the needs of the contracting authority in order to avoid compliance with public procurement legislation.
Examples: Technical Guidance Services for a 6-year period Funding of US$300,000 ex-VAT. was awarded for the purchase of technical consulting services in support of a project over a 6-year period. The number of consultation days is known and there is a brief clarification in which the details of the requirement are indicated. The only aspect of the contract that is not known is the actual dates on which consultation days are required. The purchase is above the EU threshold (according to the aggregation rules and because, as you know, the value of the contract is $300,000). For this requirement, an appeal/commitment contract could be created for the application period. Marketing services for a 5-year promotion period of $200,000 OF THE ex VAT was awarded for the purchase of Marketing Consultancy Services for a period of 6 years.