SaaS Cost Allocation: How to Build Chargeback Models Across Departments | Cledara

SaaS cost allocation is the process of assigning software subscription expenses to the departments that consume them, and most scaling companies get it wrong. With the average company now spending $4,830 per employee per year on SaaS and purchasing authority spread across every department, finance teams need a structured approach to allocate costs accurately. This guide covers the two dominant allocation models (showback and chargeback), explains when to use each, and walks through a four-step process to build a working chargeback model: classifying tools, choosing allocation keys, setting up