# ISO 20000 Budgeting and Accounting for IT Services > Establish budgeting and accounting for IT services per ISO/IEC 20000-1:2011 Clause 6.4. Creates service cost models with cost categories, allocation methods, budgeting cycles, and per-service cost breakdowns. Validates the service costs register for completeness. Tags: ISO 20000, SMS, Budgeting, Financial Management, IT Service Management ## Example Prompts - Create a budgeting and accounting policy for our IT services - Define cost categories and allocation methods for service cost models - Build per-service cost breakdowns for the SMS - Validate our service costs register has categories and budgeting cycle URL: https://rakenne.app/skills/iso20000-budgeting-accounting/index.md Try this skill: https://rakenne.app/a/?skill=iso20000-budgeting-accounting ## Overview Establish budgeting and accounting processes for IT services per Clause 6.4 of ISO/IEC 20000-1:2011. This skill produces a budgeting and accounting policy, service cost models with cost categories and allocation methods, and a structured register of per-service cost breakdowns that support financial management of the SMS. Many IT organizations can tell you their total spend but cannot answer a simple question: "How much does it cost to deliver the email service?" Clause 6.4 requires this level of visibility. This skill defines cost categories, establishes how shared costs are allocated across services, documents the annual budgeting cycle, and builds per-service cost models -- giving management the financial transparency needed to make informed decisions about service investment, optimization, and chargeback. For a step-by-step walkthrough, see the [**ISO 20000 SMS workspace tutorial**](/learn/tutorials/iso20000-sms-workspace-guide/). ### What It Covers - **Cost categories** -- personnel, hardware, software, facilities, third-party services, and overhead - **Allocation methods** -- direct costs, usage-based, headcount-based, and revenue-based allocation for shared costs - **Per-service cost models** -- total cost of ownership and cost per unit of consumption - **Budgeting cycle** -- planning, approval, execution, monitoring, and year-end review phases - **Chargeback/showback** -- cost recovery or visibility model for business units - **Service costs register** -- structured JSON register with categories, allocation, cycle, and per-service breakdowns ## Example Conversation > **You:** We need to set up budgeting and accounting for our IT services to comply with ISO 20000 Clause 6.4. We have 5 services and a total annual IT budget of about 2 million euros. > > **Agent:** I'll build the budgeting and accounting policy and service cost models. Let me understand your current financial setup: > > 1. How are IT costs tracked today? (single cost center, per-department, per-project) > 2. Do you use chargeback (billing business units) or showback (visibility only)? > 3. What is your fiscal year and budget planning cycle? > 4. Do you have a breakdown of your 2M by category? (staff, licenses, infrastructure, etc.) > > **You:** We have one IT cost center today with no per-service breakdown. We use showback -- departments see their IT allocation but we don't bill internally. Fiscal year is January-December, budget planning starts in September. Rough breakdown: 900K personnel, 400K software licenses, 350K infrastructure, 200K third-party services, 150K facilities and overhead. > > **Agent:** Good. I'll define these cost categories and allocate them across your 5 services. For shared costs like infrastructure and personnel, I need to choose an allocation method: > > - **Infrastructure** -- usage-based allocation makes sense (CPU/storage consumed per service) > - **Personnel** -- time-based allocation (percentage of team effort per service) or equal distribution > - **Software licenses** -- direct assignment where possible (ERP license to ERP service), shared licenses allocated by user count > > Which approach feels right for personnel allocation? Time tracking or estimated effort percentages? > > **You:** We don't track time formally. Estimated effort percentages would be more realistic -- the ERP takes about 40% of our team's time, email and VPN are about 15% each, file storage and intranet about 15% combined. > > **Agent:** I'll use effort-based allocation for personnel. Here's the draft cost model: > > | Service | Personnel | Software | Infrastructure | Third-Party | Total | > |---------|----------:|----------:|--------------:|------------:|------:| > | ERP System | 360K | 180K | 140K | 80K | 760K | > | Email Service | 135K | 80K | 70K | 60K | 345K | > | VPN Service | 135K | 40K | 50K | 30K | 255K | > | File Storage | 135K | 60K | 60K | 20K | 275K | > | Intranet Portal | 135K | 40K | 30K | 10K | 215K | > > Total: 1.85M allocated + 150K overhead = 2M. Does this look reasonable? > > **You:** The ERP costs look right -- it's by far our most expensive service. Let's go with this. > > **Agent:** I've built the service costs register with all categories, allocation methods, and the budgeting cycle. Let me run the `budget_policy_validator`... > > **Result:** PASS -- Cost categories defined, allocation method specified, budgeting cycle documented with planning start, approval deadline, and review frequency. ## Sample Output Excerpt The skill produces a structured JSON service costs register. Here is a representative excerpt showing cost categories, the budgeting cycle, and one service cost model. --- ```json { "cost_categories": [ { "category": "Personnel", "description": "Staff salaries, benefits, training, and contractor costs" }, { "category": "Software", "description": "License fees, SaaS subscriptions, and maintenance agreements" }, { "category": "Infrastructure", "description": "Servers, storage, networking, and cloud compute" }, { "category": "Third-party Services", "description": "Outsourced services, managed services, and consultants" }, { "category": "Facilities & Overhead", "description": "Data center, office space, utilities, insurance, governance" } ], "allocation_method": "Direct assignment where possible; effort-based for personnel, usage-based for infrastructure, user-count for shared licenses", "budgeting_cycle": { "planning_start": "September", "approval_deadline": "November", "fiscal_year_start": "January", "review_frequency": "quarterly", "variance_threshold": "10%" }, "cost_model": "showback", "services": [ { "service_id": "SVC-002", "service_name": "ERP System", "direct_costs": [ { "category": "Software", "item": "ERP platform license", "annual_cost": "150000" }, { "category": "Software", "item": "Database license", "annual_cost": "30000" }, { "category": "Third-party Services", "item": "ERP vendor support contract", "annual_cost": "80000" } ], "allocated_costs": [ { "category": "Personnel", "allocation_method": "effort-based (40%)", "annual_cost": "360000" }, { "category": "Infrastructure", "allocation_method": "usage-based", "annual_cost": "140000" } ], "total_annual_cost": "760000", "cost_per_user": "3800" } ] } ``` ## Extension Tools ### `budget_policy_validator` Validates `service-costs.json` against ISO/IEC 20000-1:2011 Clause 6.4 requirements: | Check | What It Does | |-------|-------------| | **Cost categories** | At least one cost category must be defined with a name and description | | **Allocation method** | A cost allocation method must be specified (not empty) | | **Budgeting cycle** | The budgeting cycle must include planning start, approval deadline, and fiscal year start | | **Review frequency** | A budget review frequency must be defined (monthly, quarterly, etc.) | | **Service cost entries** | Flags services missing cost breakdowns or total annual cost | ## Getting Started Start by activating the *ISO 20000 Budgeting and Accounting for IT Services* skill. The agent will check for your service catalog, then guide you through defining cost categories, choosing allocation methods, and building per-service cost models. Have this information ready: - Your service catalog (or list of IT services) - Total annual IT budget and a rough breakdown by cost type (staff, licenses, infrastructure, etc.) - Current financial tracking approach (cost centers, chargeback vs showback) - Fiscal year timing and budget planning cycle - Any existing per-service cost data or vendor contract values The service cost models built here provide the financial foundation for management review and support investment decisions across other SMS processes like capacity planning and service improvement. --- Back to [Skill Library](https://rakenne.app/skills/index.md)