Usage-based charges are always paid at the end of the billing period, based on the amount of consumption that occurred. However, you could possibly need to define a spending minimum that a customer needs to commit to.
If your customer spends less than the committed amount, you will charge a true-up fee equal to the difference between the commitment and the actual usage. Please note that this true-up fee is tied to the initial charge but will appear as a separate line item in an invoice or in a credit note.
Spending minimums and true-up fees are always prorated based on the number of days used in the subscription. This ensures fairness if your customer signs up at the end of the month, upgrades to a new plan, or terminates an ongoing subscription before the end of the period.
In the example below, a customer is billed based on Monthly Tracked Users (MTU), with a standard pricing of $0.010 per tracked users. However, the customer is committed to a spending minimum of $100. If the total consumption of MTUs for the period is $50, a true-up fee of $50 will be charged.
To define a charge spending minimum:
- Go to a Plan;
- Add a usage-based charge;
- Define a price model;
- Click the add a spending minimum button; and
- Define a spending minimum amount.