Chargeback

What is Chargeback?

Chargeback is the way of cross-charging other departments or business units within an organization. This is a financial management strategy to recover costs when one department spends on behalf of other departments and charges them back based on their usage or consumption. It means that one department usually spends for procuring the resources (mostly cloud), and other business units are cross charged based on their consumption or usage.

A chargeback is the cost of developing a solution or application and charging it to the business units based on its usage.

Chargeback Process Overview

1. Monthly spend allocation

   1. Before a chargeback can be created, the total spend from the solution offerring for the month needs to be allocated to business units.

   2. Allocation can be fully or partially and based on usage, cost drivers, or distribution logic defined in your system.

2. Define chargeback report (optional)

   1. Navigate to Admin > Settings > Chargeback to define the report format and structure. By default, the reports includes the columns like, Solution Offering, Solution Offering ID, Business Unit, Business Unit ID and Spend.

   2. This configuration determines how the chargeback data will appear (e.g., business unit view, or solution offering view).

   3. You can also view the chargeback data without defining the report.

3. Chargeback creation

   1. Once the business unit spend has been allocated for the month, you must manually create a chargeback.

   2. After creating the chargeback, the status is changed to DRAFT.

   3. Chargeback creation generates a record that contains the allocated amounts for all business units for that specific month.

   4. This step is important because it locks in the data for validation and approval.

When a chargeback is created, the selected month is locked. This means:

• No further data uploads can be made for that month.

• Existing records for that month cannot be edited, copied, or deleted.

• If changes are needed, Admin must revert the chargeback for that month.

3. Review and approval

   1. After a chargeback is created, you can open it to view the detailed breakdown of allocated spend.

   2. Once reviewed, the chargeback must be approved by Chargeback Approver to finalize it. The status then changed to APPROVED. Approval ensures that the data is confirmed and ready for reporting, billing, or internal invoicing.

   3. An approval step ensures the chargeback is finalized and confirmed for reporting in Chargeback Overview dashboard.

   4. Approved chargeback cannot be edited but can be reverted.

4. Download or export

   1. After approval, you can download the finalized chargeback report in CSV format.

   2. Optionally, you can export the chargeback directly to configured cloud storage (e.g., AWS S3, Azure Blob, Google Cloud Storage) for sharing, archiving, or integration with external systems.