Glossary
What is Total Contract Value (TCV)?
Total Contract Value (TCV) is the total amount a customer commits to pay over the full term of a contract, including recurring charges and one-time fees.
By the forquotez team. Last updated October 13, 2026.
How TCV is calculated
The basic formula in plain text:
TCV = (monthly recurring amount x contract term in months) + one-time fees - one-time credits
Use the recurring amount the customer actually pays after discounts. One-time fees cover items such as setup, implementation or hardware. One-time credits are concessions that reduce a single invoice without changing the recurring rate.
TCV counts only committed revenue. Expected renewals, usage overages and upsells that are not in the contract stay out.
A hypothetical example
This is a hypothetical example. Fictional IT Co signs a 36-month agreement at $4,000 per month with a $3,000 onboarding fee and a $1,000 first-invoice credit.
TCV = ($4,000 x 36) + $3,000 - $1,000 = $146,000.
You can run your own numbers in the TCV and ACV calculator.
Common mistakes
- Confusing TCV with ACV. TCV covers the whole term. ACV expresses the same contract per year.
- Leaving out one-time fees. They are part of what the customer commits to.
- Using list price. TCV should reflect the discounted price on the contract.
- Hiding it from the buyer. A buyer who only sees a monthly figure can be surprised by the full commitment. forquotez shows TCV on the live quote, the share page and the PDF. See multi-year contracts and TCV.
Frequently asked questions
Does TCV include one-time fees?
Yes. TCV includes every committed charge in the contract, recurring and one-time, less any one-time credits.
What is the difference between TCV and ACV?
TCV is the value of the entire contract term. ACV is the value of that contract averaged per year.
Does TCV include renewals?
No. A renewal is a new commitment and gets its own TCV when it is signed.
Build your first quote and present it on your next call.
Start a free 30-day trial