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Do expected service credits erase the contract margin?

Include incident-related credits and remediation in annual contract contribution.

Example scenario

Editable demonstration inputs, not verified industry benchmarks. Enable JavaScript to calculate your own scenario.

Annual managed-service fee
$600,000
Annual normal delivery cost
$420,000
Credit-triggering incidents / year
4
Monthly fee credited / incident
20 %
Extra remediation cost / incident
$8,000
Annual prevention investment
$15,000
Annual contract contribution after SLA costs$93,000

Example result only, not a forecast or promise.

Annual service credits
$40,000
Annual extra remediation
$32,000
Contribution before SLA & prevention costs
$180,000

What to do with this result

Review credit caps and incident correlation against the contract; the model is an expected-cost scenario, not a guarantee of SLA compliance.

Know what is inside the model.

Planning model, not personalized financial advice. Your inputs remain in your browser.

Calculation method

Annual contribution = annual fee − normal delivery cost − incidents × (annual fee / 12 × monthly credit share + remediation cost) − prevention investment.

Assumptions and limitations

  • Example inputs are editable scenarios, not Aryo results or independently verified industry benchmarks.
  • Use collected revenue and fully loaded delivery costs consistently. Released time is capacity, not automatically a cash saving.

Turn the number into a decision.

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