Multi-Year Contract Savings Calculator accuracy and testing

Formula source

• Baseline total = sum of current annual spend with user-entered annual increases across the term. Proposed total = proposed annual spend * contract years + implementation cost + switching cost. Net savings = baseline total - proposed total.

Test cases

Known limitations

• This page documents the checked-in calculator logic and does not certify results for every real-world edge case.
• Use the result as a planning estimate unless the calculator page states a stricter purpose.

Assumptions

• All prices, discounts, costs, volumes, terms, and rates are user-entered assumptions.
• Calculations are deterministic and run locally in the browser without uploading procurement data.
• Results are planning estimates and do not replace legal, accounting, tax, security, operational, or procurement review.

Unit handling

• Current Annual Spend accepts values in $.
• Proposed Annual Spend accepts values in $.
• Contract Term accepts values in years.
• Baseline Annual Increase accepts values in %.
• Implementation Cost accepts values in $.
• Switching or Exit Cost accepts values in $.
• Net Contract Savings is displayed as currency.
• Baseline Total Spend is displayed as currency.
• Proposed Total Spend is displayed as currency.
• Savings Percent is displayed as a percentage.

Rounding rules

• Number displays use up to 2 decimal places in the calculator UI.
• Currency outputs are displayed with standard US dollar formatting.
• Percent outputs are displayed with two decimal places.
• Input precision follows configured step values where provided.

Version history

Change log