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Get started on usage-based subscription management and billing on this introductory article: Introduction to Usage-Based Billing.
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With tiered pricing plans, we have 4 options available: prepaid, formula, amount per unit and fixed price.
For a Tier with the amount per unit, you can set multiple tiers for the no. of units and the price per tier. e.g. The screenshot below shows a tiered pricing plan where the customer pays $5 for the first 500 units, then $4 for every unit between 500-2000, and then $3 for every unit above 2000.
The fixed price and formula options function similarly to the amount per unit tier option above, instead you can set a fixed price or formula for each tier.
The prepaid tier covers cases where customer pays a flat fee for a certain number of units, after which they will be billed for overage. In the example below, the first 150,000 units are prepaid, each unit is priced at $2 so the amount invoiced at the beginning of the billing period is $300,000.
Let’s say at the end of the billing period they used a total of 170,000 units, this means they depleted the 150,000 they prepaid for, and used an extra 20,000 units. Therefore, the next billing periods invoice will contain a line item for the following prepaid period of $300,000 (billed in advance) and a line item for $50,000 (20,000*$2.50) for the 20,000 extra units they used in the last billing period (billed in arrears).
Setting a prepaid tier and an additional per-unit tier beyond the prepaid maximum will result in two transactions being created in Subscript: one for the prepaid amount, and one for any overage if the prepaid credits are exhausted.
When the Carry over unused units box is checked, if in a period they only use 100,000/150,000 units, the remaining 50,000 units are rolled over to the the next period, so they’ll have a total of 200,000 units to use before they’re charged extra, this will accumulate over every billing period until the contract ends.
There are two options for how to recognize a prepaid tier:
