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Usage-based Billing Usecases 

The Usage Based Billing feature is currently in early access. Contact Us to join the Early Adopter Program and enable this feature.

Use Case 1: Automating Task-Based Billing for SaaS 

Let's consider a business "Acme Inc." that provides automation solutions for SaaS companies. Customers are charged based on the number of automation tasks executed every month. Acme targets customers with varying automation needs, wherein most users have a predictable number of requests each month and even customers with high-volume requests.

Let us look at how Chargebee's usage-based billing can be applied for Acme.

Pricing Model 

Acme adopts a hybrid pricing model combining:

  • Included Usage (customer is entitled to certain features/quotas via fixed platform fee)

  • On-demand Usage (customer pays for any excess usage via pay-as-you-go fee)

Configuration in Chargebee Billing 

Let's look at how to automate usage-based billing for Acme using Chargebee:

Step 1: Product Catalog

Acme's product catalog must be set up with the following plans and addons:

Plans & Addons
Name
 Configuration
Plan 1 (Fixed fee for included usage) Professional Monthly Priced at $49/month with 100K tasks as included usage.
Plan 2 (Fixed fee for included usage) Team Monthly Priced at $99/month with 500K tasks as included usage.
Addon 1 (Usage-based fee) Tasks Monthly Priced at $0.1 per task (per-unit pricing).

Step 2: Usage Events

Acme can send usage events to Chargebee Billing through two API endpoints, Ingest a Usage Event for individual events, and Ingest Usage Events in Batch for bulk submissions.

Alternatively, Acme can also import usage events in bulk using the Chargebee Billing application user interface. The following event details must be passed along with other usage event data.

  • Event Trigger
    • An event is triggered whenever an automation is executed by Acme.
  • Event Attributes
    • id: Universally Unique Identifier(UUID) to identify an event.
    • usage_timestamp: Captures the time when the event occurred (critical for billing and usage insights).
    • subscription_id: Identifies the subscription to which the event is attributed.
    • automation_id: Identifies the executed automation.
    • number_of_tasks: Records the number of tasks executed in the automation.

Step 3: Metered Feature Creation

The following metered feature needs to be created to track the number of the tasks that are automated.

Metered Feature (F1) - Tracks the SUM of tasks executed.

Step 4: Link Pricing for Metered Feature

Once the metered feature is created, the next step is to link pricing for the metered feature and map it with relevant plans and addons price points.

Link Items: For Acme's pricing requirement, the following plans and addons need to be linked:

Plans

  • F1 -> Professional Monthly
  • F1 -> Team Monthly

Add-On

  • F1 -> Tasks Monthly

Set included usage: This denotes specifying the included usage for the feature for the plan's billing period, in Acme's case specifying the number of tasks per month. Chargebee automatically tracks usage for the feature and when the included usage is exceeded, additional cost is calculated by multiplying the units purchased.

Specify the included usage as follows:

Plans

  • F1 -> Professional Monthly: 100,000 tasks/month.
  • F1 -> Team Monthly: 500,000 tasks/month.

Add-on

  • F1 -> Additional Tasks Monthly: On-demand usage(entitlement limit is automatically associated due to usage-based configuration).

Once Acme implements all the steps mentioned above, Chargebee Billing begins to track usage and bills Acme's subscribers appropriately.

Usage Tracking and Billing in Chargebee 

Let's take a look into a subscription record to see the usage summary:

Sample Subscription

Assume a customer, John Doe subscribes to the Professional Monthly plan and purchases 100K tasks/month. The subscription details are as follows:

Line Item 1: Professional Monthly

  • Base price for 100K tasks: $49.

Line Item 2: Tasks Monthly

  • Usage over 100K tasks is billed at $0.1 per task.

Usage Tracking

  1. Customer John Doe executes an automation, triggering an event.
  2. Event records the number of tasks executed.
  3. SUM of tasks (F1) is calculated for John Doe for the billing cycle.

Billing

  1. If the total tasks exceed the included usage which is 100K tasks/month, overages are billed at $0.1 per task via the Tasks Monthly add-on.
  2. Usage and billing insights are updated in real-time based on recorded events.
  3. Upon renewal, a pending invoice gets generated and events continue to be recorded for upto 30 days in the past even after invoice generation. Once the invoice is finalised, any additional events will not be billed.
  4. John Doe is invoiced with the usage summary doc.

This setup allows Acme to scale billing based on actual usage while offering predictable pricing for customers within their plan limits.

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