ACV & TCV — Annual / Total Contract Value

Definition

ACV is the per-year value of a contract; TCV is its full value including one-time fees.

Formula

ACV = Total contract value / Contract years
TCV = full contract value incl. one-time fees

Worked Example

3-year contract at $30k/year plus $6k setup fee:

ACV = $30,000
TCV = $96,000

Interpretation & Pitfalls

Sales teams quote TCV (bigger number); finance plans on ACV (annual run-rate). Confusing them inflates forecasts by the contract length.

In TupicFinance

Contract records hold term and one-time components so both figures are available.