Variance in Amortized and Actual cost in BIlling

Question

Hi Team,

Hope you are safe and doing great.

This is regarding a question from one of our customers 'Commscope Technologies LLC' which they use Flexera's Cloud Cost Optimization tool.

Regarding the monthly variance between Amortized and Actual costs in Azure billing.

For example:

July:

Amortized cost: $275,698.42

Actual cost: $275,209.54

August:

Amortized cost: $278,858.50

Actual cost: $278,289.66

I understand that Amortized cost represents the costs spread over the resources used, while Actual cost reflects the amounts billed directly to the accounts that made the purchases.

However, I am seeing a consistent difference between these two figures each month. Could you kindly help clarify the following:

What is causing this regular variance between the Amortized and Actual costs?

Is there a refund or adjustment being applied each month? If so, which subscription or resource group is receiving these refunds or adjustments?

Thank you in advance for your assistance. I look forward to your response.

Answer 1

Amortized costs spread the cost of reserved instances or committed services over their usage period, while actual costs reflect the immediate charges. This difference arises when usage doesn't match the expected reserved amount, which causes a variance.

To identify which subscription or resource group is receiving these adjustments, you can:

Look at the adjustments/refunds section in your invoice for subscription-level information.

See: https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/view-amortized-costs?source=recommendations#metrics-affect-how-costs-are-shown

I would actually recommend you reach out to the billing team by creating a Support Request here: https://azure.microsoft.com/en-us/support/create-ticket. This is free and you will get details you need.

You can mark it 'Accept Answer' and 'Upvote' if this helped you

Regards,

Abiola