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How does amortization work in LicenceOne?

LicenceOne's amortization feature set allows users to visualize the cost of applications over multiple months. For example, if you make 1 payment of $120 to access an application for a year; by amortizing the spend, LicenceOne will display a spend of $10 per month.

This should then allow you to see real spend changes at a glance, rather than just seasonal changes in cash flow when your annual subscriptions are renewed.

How do I activate/deactivate amortization reporting in LicenceOne?

Amortization is enabled by default for all LicenceOne accounts. To switch between amortized and cash flow amounts, use the switcher toggle on the top right of your graphs:

If you'd like to disable or re-enable this setting, you can do so by clicking on the "Enable amortization" toggle on the amortization settings page of your LicenceOne account:

How does LicenceOne know how many months to spread a payment over?

Based on an application's "Useful life": an accounting term which essentially means "how long will this payment give you access to this app".

For example:
If you pay for an application on a monthly basis, each payment will give you access to that application for 1 month
If you pay for an application on an annual basis, each payment will give you access to that application for 12 months

To make life easier, LicenceOne pre-fills the useful life periods based on the billing cycles (monthly, annually etc.) you assign to applications, which can be changed on your in your account's amortization settings.

You may also wish to apply a different useful life to each application, for example, when the billing cycle is "other". To do so, head to the "Advanced" tab of your application view and input the custom useful life period that should be applied.

Updated on: 25/04/2023

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