IT chargeback / showback

IT chargeback is an accounting strategy that applies the costs of IT services, hardware or software to the business unit in which they are used. IT showback is similar to IT chargeback, but the charges are for informational purposes only and no one is billed.

IT chargeback is an accounting strategy that applies the costs of IT hardware, software, cloud services or shared services to the business unit in which they are used. IT showback is similar to IT chargeback, but the prices are for informational purposes only and no one is billed.

Chargeback and showback systems are sometimes referred to as "responsibility accounting systems" because they quantify which departments or individuals are responsible for significant internal expenses. Both strategies are intended to shift responsibility to users and encourage them, as corporate customers, to become more aware of costs and treat IT services as they would any other utility.

Reporting systems for IT chargeback and IT showback can help administrators see exactly what factors are driving IT expenditures, which can be helpful for budgeting, planning and forecasting. Although both chargeback and showback provide end users with more insight into which business decisions are creating expenses for the company, IT showback can be simpler to implement, while still promoting a culture of cost awareness in regards to IT assets.

See also: IT service catalog

This was first published in May 2014

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