Biz Tips: How to Use the New AWS Cost Categories for Better Cost Allocation

Biz Tips: How to Use the New AWS Cost Categories for Better Cost Allocation

Biz Tip:

How to Use the New AWS Cost Categories for Better Cost Allocation

Last week, AWS announced the general release of AWS Cost Categories. Anyone involved in managing AWS costs within your organization should ensure they understand this new feature and start using it for better cost allocation and billing management.

What are AWS cost categories?

AWS Cost Categories are now visible in the console on the billing dashboard.

AWS cost categories are a new way to create custom groups that transcend tags and allow you to better manage costs according to your organizational structure, for example, by application group, team, or location.

Cost categories allow you to write rules and create custom groups of billing line items, which you can then use in AWS Cost Explorer, AWS Budgets, the AWS Cost and Usage Report, etc. You can group by account, tag, service, and charge types.

How are cost categories different from tags?

At first, this “category” structure may seem similar to the tagging structure you already use in Cost Explorer, but there are a few key differences.

First, you can create logic to categorize costs from specific services to all belong to the same team. For example, you may have RDS resources belong to a category for the DBA team; Redshift belong to a FinOps category, or CodePipeline belong to a DevOps category. Categories also allow you to include resources that are not taggable, such as AWS support costs and some Reserved Instance charges.

Why should you use AWS cost categories?

The ability to create your own categorization rules is what makes this new option powerful. You can do this through the Cost Categories rule builder, JSON editor, or API. The rule builder is straightforward and has some built-in logic options such as “is, is not, contains, starts with” and “ends with”.

For organizations with many AWS accounts, categories of accounts into business units, products, applications, or production vs. non-production are helpful in allocating and evaluating costs.

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