{"id":9392,"date":"2023-03-29T15:25:32","date_gmt":"2023-03-29T19:25:32","guid":{"rendered":"https:\/\/www.sage.com\/en-ca\/blog\/?post_type=sage_glossary&#038;p=9392"},"modified":"2023-03-29T15:25:32","modified_gmt":"2023-03-29T19:25:32","slug":"what-is-consumption-billing","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-ca\/blog\/glossary\/what-is-consumption-billing\/","title":{"rendered":"What is consumption billing?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/glossary\/\" class=\"entry-header__link\">Glossary definition<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is consumption billing?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is consumption billing?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-ca\/blog\/glossary\/what-is-consumption-billing\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<p class=\"\">Consumption billing is when you charge your customers based on what they consume or use. It can also be called usage billing.<\/p>\n\n\n\n<p class=\"\">Companies with&nbsp;<a href=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/what-is-a-subscription-business-model\/\r\">subscription business models<\/a>&nbsp;may price consumption of their services differently depending on the service they provide and on how customers perceive their value. Types of consumption may include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Units<\/strong>&nbsp;\u2013 this pay-as-you-go model is based on how much your customers use and aligns with the number of users<\/li>\n\n\n\n<li><strong>Tiers<\/strong>&nbsp;\u2013 this incremental model is based on usage increments, as your customers use more of your service, they are bumped up to the next billing increment or tier<\/li>\n\n\n\n<li><strong>Volume<\/strong>&nbsp;\u2013 just as it sounds, this is based on usage volume. As your customers hit your set billing thresholds, they are charged based on the highest threshold or tier they reach<\/li>\n\n\n\n<li><strong>Minimum<\/strong>&nbsp;&#8211; minimum price points based on usage<\/li>\n\n\n\n<li><strong>Flat Rate<\/strong>&nbsp;&#8211; fixed fee regardless of usage<\/li>\n\n\n\n<li><strong>Standard, Volume and Flat Rate Tiered<\/strong>&nbsp;&#8211; various price points for ranges of usage<\/li>\n\n\n\n<li><strong>Threshold<\/strong>&nbsp;&#8211; pricing changes based on usage<\/li>\n\n\n\n<li><strong>Rollover<\/strong>&nbsp;&#8211; usage allocated not used in one service period is shifted to the next<\/li>\n\n\n\n<li><strong>Pay-as-you-go<\/strong>&nbsp;&#8211; usage-based pricing, paying as the customers consumes\n<ul class=\"wp-block-list\"><\/ul>\n<\/li>\n\n\n\n<li><strong>Time-based<\/strong>&nbsp;&#8211; pricing set on a fixed time, typical of subscription offers<\/li>\n\n\n\n<li><strong>Overage<\/strong>&nbsp;&#8211; fees for using more than the allotment<\/li>\n<\/ul>\n\n\n\n<p class=\"\">You may want to provide your customers with a variety of consumption billing options as you evolve your product line and perhaps, prove product-market fit. With the&nbsp;<a href=\"https:\/\/www.sage.com\/en-us\/sage-business-cloud\/intacct\/product-capabilities\/extended-capabilities\/subscription-billing\/\r\">right subscription billing solution<\/a>, you should be able to analyze your sales and SaaS metrics to continuously monitor your pricing and billing models.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p class=\"cta-content__title\">Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-8949a954-88b2-43bb-8b8a-77c53eb34350\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Consumption billing is when you charge your customers based on what they consume or use. It can also be called usage billing. Companies with&nbsp;subscription business models&nbsp;may price consumption of their services differently depending on the service they provide and on how customers perceive their value. Types of consumption may include: You may want to provide [&hellip;]<\/p>\n","protected":false},"author":1169,"featured_media":0,"template":"","meta":{"_sage_video":false,"footnotes":""},"tags":[162,258],"class_list":["post-9392","sage_glossary","type-sage_glossary","status-publish","hentry","tag-accounting-101","tag-cloud-financial-management"],"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Canada English","distributor_original_site_url":"https:\/\/www.sage.com\/en-ca\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/sage_glossary\/9392","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/sage_glossary"}],"about":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/types\/sage_glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/users\/1169"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/sage_glossary\/9392\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media?parent=9392"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/tags?post=9392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}