Shared services are some of the hardest costs to deal with in cloud financial management. They don’t belong neatly to one team or product, yet they show up as large, untagged line items in the AWS bill. Without a way to allocate them, Finance can’t build accurate COGS, Engineering can’t see their real spend, and budgets fall apart. 

In this post, we’ll break down what shared costs are, why they’re challenging, how to allocate them — and how to automate the full process with nOps.

What Are Shared Costs?

Shared costs are resources or services consumed by multiple teams, products, or environments at once. Think of NAT Gateways, data transfer, load balancers, CloudWatch, KMS, or enterprise support. 

They’re critical for running workloads, but since they aren’t tied to a single tag or account, it’s not obvious who should pay for them. The result is big unallocated chunks of spend that make tracking budgets and unit economics much harder than they should be.

Cost Allocation Strategies

There are a few common ways organizations handle shared costs:

Even split

The simplest option—divide the bill equally across teams or products. It’s quick to implement but typically the least accurate. If one team barely touches a shared service, they’ll be overcharged, while heavy users don’t feel the impact of driving up the bill. 

Fixed allocation

Some organizations assign pre-set percentages to each team (e.g., Finance 40%, Platform 30%, Product A 20%). It’s easier than usage-based methods and often fairer than an even split when usage is hard to measure. But, allocations can drift over time and need occasional renegotiation.

Usage-based

Allocate based on a measurable driver, like gb transferred for data egress, requests for load balancers, log volume for CloudWatch, or seat count for SaaS tools. This is much fairer but requires pulling and maintaining usage data from multiple systems (i.e. overhead). 

Hybrid 

A custom, hybrid approach is another option. Maybe one team consistently uses a baseline amount of data transfer, while spikes come from everyone else. In that case, you could set a fixed floor for the heavy user and split the remainder proportionally.

One-click allocate costs using your preferred strategy in the nOps platform

Common Types of Shared Costs

Once you’ve picked an allocation strategy, the next step is mapping it to actual services. Here are some of the most common shared costs and the metrics you can use to split them:

Shared Service

Description

Allocation Metric

Data transfer

Inter-AZ, inter-region, or internet egress

GB egress per product

NAT Gateways

Shared network access

Requests per account

CloudWatch

Monitoring and logs

Logs ingested per team

KMS

Key management and encryption

API calls per workload

Load balancers

Shared front-end traffic

LCU-hrs per service

S3 shared buckets

Centralized object storage

GB-months per team

Enterprise support

AWS premium support plan

% of AWS spend

SaaS/Marketplace tools

Third-party or marketplace subscriptions

Consuming team

Step-By-Step Implementation

Once you’ve chosen an allocation strategy, the next step is turning it into a repeatable process. Here’s what that usually looks like:

1. Define cost centers and owners: Decide how you want to slice spend—by product, business unit, or environment—and assign an owner for each. 

  1. Inventory shared services and assign drivers: List all the shared costs in your environment and pair each with the most logical allocation driver. For example, NAT Gateways → data egress, CloudWatch → log volume, enterprise support → % of total AWS spend.

  2. Build allocation rules: Write down the rules clearly. “Split CloudWatch by log GB” or “SaaS tool allocated by seat count.”

  3. Gather data: Pull data from AWS CUR, service-level metrics, and SaaS invoices. Normalizing this across different formats can be the most time-consuming step.

  4. Apply rules and generate showbacks/ chargebacks: Run the rules against your cost data and publish the results. Even if you don’t charge teams directly, showbacks help everyone see their impact.

  5. Reconcile and adjust monthly: Usage changes, so review allocations with Finance and Engineering regularly and update when needed.

  6. Automate reporting and reviews: Bake allocations into regular reports—Slack posts, dashboards, or weekly budget reviews—so the numbers stay visible without adding more manual work.

Screenshot of the cost analysis(Engineering Budget by Environment) dashboard.

Common Pitfalls of Allocating Shared Costs

Cost allocation is easy to get wrong if you’re doing it manually. The most common issues include:

  • Over-reliance on tags: many shared services can’t be tagged in the first place.
  • Static rules in dynamic usage: allocations drift quickly if they aren’t reviewed.
  • Missing SaaS invoices: third-party and Marketplace costs often fall through the cracks.
  • Mishandling credits/refunds: without a clear policy, these get dumped in “miscellaneous.”
  • Double-counting transfer: network costs are especially tricky to assign cleanly.

These challenges are why most teams struggle to keep allocations accurate. In the next section, we’ll show how nOps avoids all of them by automating the process end-to-end.

How nOps Makes Shared Costs Easy

nOps removes the heavy lifting with automation, making it ultra-fast and easy to allocate shared costs.

  • One-click shared-cost allocation: Split costs evenly, by custom percentages, or by usage drivers without building spreadsheets or custom scripts.
  • Automated tagging: Apply dynamic rules by region, tags, accounts, usage type, or even Kubernetes concepts like namespaces and labels. This closes the gap for resources and services that don’t support native tagging.
  • Unified reporting across AWS + SaaS + AI + Marketplace: Pull in all your shared spend automatically, so third-party invoices don’t fall through the cracks.
  • Automated showbacks and chargebacks: Keep Finance and Engineering aligned with reports that update continuously, delivered through Slack or email.
  • Budget adherence and alerts: Get proactive notifications when allocations drift or credits/refunds need to be applied, so rules stay accurate in dynamic environments.

nOps was recently ranked #1 with five stars in G2’s cloud cost management category, and we optimize $2+ billion in cloud spend for our customers. 

Try it out with your own AWS account by booking a demo with one of our AWS experts.