2.13 Effective Cost Analysis
2.13.1 Description
FOCUS enables practitioners to analyze costs on an accrual basis, where expenses are recognized when resources are consumed, services are used, or contract commitments are recognized, regardless of when those costs are invoiced. The EffectiveCost column reflects all applicable pricing adjustments and distributes the cost of covering charges (one-time or recurring purchases) to the covered charges they offset.
For charges that are not covered charges, EffectiveCost reflects the same amount as BilledCost. For covering charges (e.g., commitment discount purchases, prepayments, or marketplace purchases), EffectiveCost is 0 because their cost is recognized on the covered charges instead. In commitment discount scenarios, CommitmentDiscountStatus distinguishes whether amortized cost was allocated to consumed resources or services ("Used") or remained unallocated ("Unused").
EffectiveCost is commonly used for accrual-based reporting, cost allocation, chargeback, and spending trend analysis. For scenarios involving commitment discounts across different payment models, see Examples: Commitment Discount Flexibility. For marketplace and SaaS scenarios, see Examples: SaaS.
2.13.2 Directly Dependent Columns
2.13.3 Supporting Columns
2.13.4 Example SQL Queries
EffectiveCost can be analyzed using billing period or charge period time filters. Billing period aligns with invoice cycles and is useful for financial reporting. Charge period captures when resources were consumed or commitments were recognized, which is more precise for consumption-based analysis.
2.13.4.1 Effective Cost by Service and Region
Aggregates EffectiveCost by billing period to align accrual-based cost reporting with invoice cycles.
SELECT
ServiceProviderName,
BillingPeriodStart,
BillingPeriodEnd,
ServiceCategory,
ServiceName,
RegionId,
RegionName,
PricingUnit,
SUM(EffectiveCost) AS TotalEffectiveCost,
SUM(PricingQuantity) AS TotalPricingQuantity
FROM focus_data_table
WHERE BillingPeriodStart >= ? AND BillingPeriodEnd < ?
GROUP BY
ServiceProviderName,
BillingPeriodStart,
BillingPeriodEnd,
ServiceCategory,
ServiceName,
RegionId,
RegionName,
PricingUnit2.13.4.2 Commitment Discount Effective Cost Breakdown
Analyzes commitment discount amortization by charge period, capturing costs based on when resources were consumed.
SELECT
ServiceProviderName,
CommitmentDiscountId,
CommitmentDiscountStatus,
ChargePeriodStart,
ChargePeriodEnd,
SUM(EffectiveCost) AS TotalEffectiveCost
FROM focus_data_table
WHERE ChargePeriodStart >= ? AND ChargePeriodEnd < ?
AND CommitmentDiscountId IS NOT NULL
AND ChargeCategory = 'Usage'
GROUP BY
ServiceProviderName,
CommitmentDiscountId,
CommitmentDiscountStatus,
ChargePeriodStart,
ChargePeriodEnd