Premium feature ✨: only users with a premium license can define a charge spending minimum. Please contact us to get access to Lago Cloud and Lago Self-Hosted Premium.

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:

  1. Go to a Plan;
  2. Add a usage-based charge;
  3. Define a price model;
  4. Click the add a spending minimum button; and
  5. Define a spending minimum amount.