---
title: Effective cost vs billed cost
canonical: "https://cloudmonitor.ai/docs/using-cloudmonitor/effective-vs-billed-cost/"
description: "CloudMonitor can show what you were invoiced, or what you actually used. The difference matters whenever you buy something upfront."
---

Two people can look at the same month and honestly disagree about what it cost. CloudMonitor supports
both answers, and calls the choice your **cost basis**.

## The two answers

**Billed cost** is exactly what the provider invoiced for the period — including one-off purchases,
upfront fees and refunds. It reconciles to your invoice line for line.

**Effective cost** spreads upfront and commitment fees across the period they actually cover, so
spend follows usage rather than payment. This is the default.

## When the difference bites

Buy a year of reserved capacity in January for 120,000.

- **Billed cost** puts all 120,000 in January. February through December show nothing for it.
- **Effective cost** shows 10,000 a month, every month.

Ask which team overspent in March and billed cost gives you a wrong answer — the team using that
capacity looks free, and whoever happened to purchase it looks catastrophic. That is why effective
cost is the default for showback, chargeback and any trend you plan to act on.

Billed cost earns its place at month end, when finance needs a figure that reconciles to the invoice.

**Neither is more correct.** They answer different questions. Trouble only starts when two reports
quietly use different ones, which is why this is a single setting rather than a per-report control.

## Where to change it

Your avatar ▸ **Profile & preferences** ▸ **Cost basis**. It's yours alone — changing it affects only
your own reports, and it is deliberately not a top-bar filter because most people set it once and
leave it.

## Screens that don't follow it

A few reports ignore the setting, and it isn't a bug:

- **Overview** always charts effective cost, so the trend line never spikes in a month you happened
  to prepay. The invoiced figure is on a tile beside it, so you get both.
- **Savings & Waste** shows projected savings estimates rather than spend you've incurred. An
  estimate has no invoiced-versus-amortised version.
- **WAF Recommendations** counts findings, not money.

Where a report doesn't follow the setting, the chip is grayed out with the reason — see
[why a filter is sometimes grayed out](/docs/using-cloudmonitor/global-filters/).

## A related trap: currency

CloudMonitor reports in one currency, set for the whole workspace. Changing it **swaps the symbol
only** — no amount is ever converted. If you change your reporting currency, every budget set in the
old one needs its amount re-entered.