Service credit calculation: stages and deadlines
A service credit calculation moves through four fixed stages: the trigger event, the measurement window, verification, and settlement. Each stage carries its own deadline, and missing one can end the right to claim. In most technology contracts the full cycle takes between fifteen and forty-five working days, depending on how many service levels are contested.
What changes once the clock starts
The moment a service level is missed, two clocks start together: the supplier's duty to report the failure, and the customer's window to raise a claim. Most technology contracts set a short reporting period, often five to ten working days. Missing that window does not always end the credit outright, but it shifts the burden of proof onto the customer.
A second deadline governs verification. Once the claim is filed, the supplier typically has a fixed number of days, commonly ten to fifteen, to accept, contest, or request supporting data. Silence past that point is treated, in most service level schedules, as acceptance of the customer's figures.
The four stages in practice
| Stage | Typical deadline | Who acts | If missed |
|---|---|---|---|
| Trigger logged | Same day to 2 working days | Customer's contract owner | Late logging risks losing the claim window |
| Notice to supplier | 5–10 working days from trigger | Customer | Late notice is often disregarded under the SLA |
| Supplier response | 10–15 working days from notice | Supplier | Silence usually counts as acceptance |
| Calculation and check | 5–10 working days | Both parties jointly | Unresolved figures escalate to the named contact |
| Settlement | Next invoice cycle or 30 days | Finance or billing team | Credit can lapse if not applied within the set-off period |
What to do, step by step
- The contract owner records the missed service level on the day it is detected, with timestamps from the monitoring system.
- The customer sends written notice to the supplier's contract contact within the reporting window set in the agreement.
- The supplier's account manager pulls the raw performance logs and shares them with the customer's technical lead.
- Both sides apply the credit formula from the service level schedule and compare results line by line.
- Where the figures diverge, the contract owner escalates to the named senior contact before the response period closes.
- Finance applies the agreed credit as a note against the next invoice, or as a direct set-off.
Who decides and how long it takes
Most disputes over the calculation stay inside the contract's own escalation ladder. A commercial manager on each side reviews the figures first, usually within five working days. If they cannot agree, the contract's designated senior contact takes the decision, typically within a further ten working days. Only unresolved disputes move to the forum named in the dispute-resolution clause, and that step is rare in practice.
If your situation differs
If the supplier disputes the underlying monitoring data, ask for a joint audit before applying any formula. Recalculating from figures that are still disputed rarely holds up later.
If the contract settles credits through tokenised or off-chain payment instruments rather than a standard invoice, the settlement mechanics change. Off-chain agreement tokenised rights explained step by step sets out how that structure is defined and used.
If the contract is silent on service credits altogether, there is no formula to apply. At that point the discussion moves into renegotiation, not calculation.
What this page does not cover
This page does not assess whether a supplier is worth appointing in the first place. That question sits earlier, and is covered by the Counterparty report before appointing a developer.
It also does not cover the risk of a defective filing once a dispute reaches an office or registry. That is addressed in the Document report before filing with an office explained.
Related reading
Escrow arrangements follow a similarly staged process, with their own release triggers and deadlines. See Escrow set-up step by step in practice.
Frequently asked questions
How long does service credit calculation take in practice?
The full cycle from trigger to settlement usually runs between fifteen and forty-five working days. The range depends on how quickly the supplier responds and how many service levels are contested at once.
Which documents are needed to start?
You need the monitoring logs for the affected period, the service level schedule from the contract, the credit formula itself, and a written notice recording the date the level was missed. Invoices from the same period help finance apply the figure once it is agreed.
What happens if the other side does not respond?
Most contracts treat silence past the response deadline as acceptance of the figures submitted. Keep a record of when notice was sent and confirm delivery, since that record supports the claim if the supplier later disputes it.
Verified
Reviewed 12 March 2025. This page sets out procedural mechanics only. No statute, regulation or directive is cited here by design, since the underlying national rules for this topic are not yet mapped in our registry, and a procedure page should not carry a reference nobody on our side has checked. Records supporting a calculation are kept under the approach described in Retention: the report, the extracts and our copy explained.
Next step
If an audit right has just been invoked without notice, the steps differ from a routine credit calculation. See When an audit right is invoked without notice step.
If the dispute also touches security duties that have moved onto you as a supplier, that is a separate track. See When security duties reach you as a supplier explained.