How annualised cost is calculated
Annualised cost normalises each tool's price to a yearly figure based on its billing cycle so you can compare and total spend fairly.
Software is billed on different cycles - some monthly, some quarterly, some yearly - which makes raw prices hard to compare. Annualised cost restates each tool's price as a single yearly figure so totals and comparisons are fair.
The maths follows the billing cycle. A monthly price is multiplied by twelve, a quarterly price by four, and an annual price is taken as-is. Whatever the cycle, the result is what that tool costs you over a full year.
One-off purchases annualise to zero. They are not a recurring commitment, so they do not add to a yearly run-rate, even though the original cost is still recorded on the record.
If a tool has no cost entered, its annualised figure is zero. It will not distort your totals, but it is worth filling in the cost so your spend picture is complete.
On the software record you will see both the entered price with its cycle and the annualised figure beside it, so it is clear how a monthly fee, for example, becomes a yearly number.
Because every tool is normalised the same way, annualised cost is the right figure to sum for portfolio-wide spend. Keep the billing cycle accurate on each record, since it is the multiplier that drives the whole calculation.