Billing Management: #8 Usage Billing in Logistics & Delivery Services
The logistics and delivery industry thrives on movement and precision. Every delivery completed, every kilometre driven, and every ton transported is a measurable activity. However, billing often lags behind. Many logistics companies still rely on fixed-rate or manual billing systems that don't account for fluctuating volumes, seasonal demands, or service variations.
As a result, businesses face challenges such as delayed invoicing, inconsistent revenue, and billing disputes with clients. In any industry where margins are thin and relationships depend on trust, these issues can significantly affect growth.
Zoho Billing brings automation and flexibility to the heart of logistics billing. Through usage-based billing, logistics providers can align their revenue directly with measurable usage, such as the number of deliveries, kilometres driven, or storage duration. This creates a fair, transparent, and scalable billing model for both service providers and clients.
The Traditional Billing Models
Traditional billing methods in logistics rely heavily on static pricing structures. A flat monthly fee or a standard per-delivery charge may seem convenient, but they often fail to reflect operational reality. Shipment volumes can vary by 30-50% month over month, and manual reconciliation between dispatch data and invoice introduces errors and inefficiencies.
Common challenges include:
An invoice that doesn't reflect actual usage.
Lengthy reconciliation cycles.
Under-billing or over-billing due to manual error.
Disputes caused by a lack of billing transparency.
Difficulty scaling as the business grows.
A static pricing model limits profitability and flexibility. Logistics businesses need billing systems that adapt dynamically to changing workloads, not the other way around.
What does usage billing mean for Logistics?
Usage-based billing allows logistics companies to charge customers based on actual consumption rather than a fixed value. This aligns perfectly with logistics operations, where activities are measurable and variable.
Sample Metrics | Billing Basis | Sector |
Number of Deliveries | per delivery completed | Courier and parcel services |
Distance travelled | per km/mile | Long-haul transportation |
Shipment weight | per kg/ton | Freight and bulk logistics |
Value Added Services | per service event | Packaging services |
With Zoho Billing, these metrics can be captured automatically from connected systems such as delivery tracking software, GPS devices or warehouse management tools. Each activity becomes a billable event, and invoices are generated automatically with complete transparency.
Let's look at two scenarios explaining how Zoho Billing helps logistics and delivery services based on consumption.
Scenario 1:
A regional courier service manages shipments for multiple e-commerce clients. Shipment volumes vary drastically, ranging from 500 packages per month for small vendors to 3000 for enterprises. The company needs a flexible model that scales with customer growth while better rewarding higher-volume customers.
Pricing Tier
For 1-1000 deliveries: $2.80
For 1001-2000 deliveries: $2.50
For 2001 and above: $2.20
If Client A completes 2300 deliveries a month. The billing will be as follows:
Item | Value |
No of deliveries | 2300 |
Rate per delivery: |
|
Total Invoice Value | $5,960 |
The service provider integrates the delivery tracking system with Zoho Billing using APIs. Zoho Billing automatically collects delivery data, calculates charges and generates an itemized invoice.
As a result, we get accurate, automated billing directly tied to usage. The invoice stays transparent and reduces administrative effort. Adopting a pure usage-based billing model along with a tier-based pricing model helps delivery businesses bill precisely for what is delivered, nothing more or nothing less.
As a result, we get accurate, automated billing directly tied to usage. The invoice stays transparent and reduces administrative effort. Adopting a pure usage-based billing model along with a tier-based pricing model helps delivery businesses bill precisely for what is delivered, nothing more or nothing less.
Scenario 2:
A nationwide carrier, services distributors and manufacturers. Clients have steady monthly shipment volumes but occasionally exceed their limit during high-demand periods. The service provider needs a pricing structure ensuring predictable revenue while capturing additional usage.
They offer a plan for $1,500 per month for up to 1000 shipments and an add-on usage cost of $1.20 per extra shipment beyond 1000.
They offer a plan for $1,500 per month for up to 1000 shipments and an add-on usage cost of $1.20 per extra shipment beyond 1000.
If a company ships 1450 packages in a billing cycle. The billing will cover,
If a company ships 1450 packages in a billing cycle. The billing will cover,
Item | Value |
Base Plan Price (covers 1000 shipments) | $1,500 |
Additional Usage | 450 |
Rate for additional shipment | $1.20/extra shipment |
Total Invoice Value | $2,040 |
By integrating the dispatch management system with Zoho Billing using API, the additional shipments are tracked, the overage rate is applied, and a consolidated invoice is generated.
This results in predictable revenue through the base plan and scalable income during peak sessions. Clear, detailed billing that strengthens customer trust.
The hybrid model offers flexibility for the service provider and the client, ensuring stability in slow periods and scalability in busy ones.
The hybrid model offers flexibility for the service provider and the client, ensuring stability in slow periods and scalability in busy ones.
Move on with Zoho Billing
Move on with Zoho Billing
Every delivery, kilometre, and warehouse movement represents the value your logistics business creates. With Zoho Billing, that value is captured and converted into accurate, transparent revenue.
By leveraging usage-based billing, logistics providers can modernize their financial operations, improve cash flow, and offer customers fair, data-backed pricing. Zoho Billing brings automation and intelligence to the heart of logistics billing, helping businesses deliver precision on roads and through invoices.
By leveraging usage-based billing, logistics providers can modernize their financial operations, improve cash flow, and offer customers fair, data-backed pricing. Zoho Billing brings automation and intelligence to the heart of logistics billing, helping businesses deliver precision on roads and through invoices.
As we move from usage billing to logistics, our next service will be Usage Billing in IoTs. Stay tuned!Topic Participants
Hari | Zoho Billing
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Community Learning Series | Digest #5 — September 2020
Dear customers, We're happy to bring you the September edition of our #CommunityDigest! Keep track of your subscription KPIs right from your smartphone: Last month, we enhanced our Android mobile app to help our customers get daily updates on their business health. We got to know from a lot of customers that this has made their job much more easier because they no longer have to keep a reminder to manually check on the previous day's revenue or activations. If you have not downloaded it yet, here'sCommunity Learning Series | Digest #4 - August 2020
Dear customers, We hope you're staying safe and healthy. I'm happy to bring you the fourth edition of our #CommunityDigest with some brand-new updates from us. 1. Daily Business Updates (for Android users) The Zoho Subscriptions Android app has got a cool new update: You can now get a push notification to your smartphone that lets you know how many activations and cancellations have taken place, and what's the net revenue for the previous day. The best part is, you can tell the app when exactly youCommunity Learning Series | Digest #3 - July 2020
Dear customers, We hope you're staying safe and healthy. We're glad to bring you the July edition of our #CommunityDigest. New community members can view our previous newsletters here. This time, we have two major updates and three interesting topics for you: 1. Zoho Subscriptions Developer Community Since the inception of Zoho Subscriptions, our team believed that the recurring billing platform we provide should be able to offer an extensive API library that empowers businesses to automate mostIntroducing: Community Learning Series | Digest #1 - May 2020
Dear customers, We hope you are staying safe and healthy. Helping businesses manage their customer subscriptions more efficiently has always been, and always will be, our goal at Zoho Subscriptions. We strongly believe this is possible if we grow together as a community and share what we know with each other. To nurture this shared learning experience, here is our brand-new Community Learning Series! Welcome to the first edition of our digest! Each edition of our community digest includes guides
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