Billing Management: #9 Usage Billing in IoTs

We live in a world where connectivity has become a lifestyle rather than a luxury. From smart thermostats that adjust your home's temperature to GPS trackers monitoring end-to-end fleets and sensors that optimize energy grids, the Internet of Things has woven digital intelligence into everyday life.

Billions of devices are constantly talking to us, to each other and to the cloud, providing an avalanche of data every second. This data fuels smart decisions, greater efficiency and an entirely new business model.

But for IoT providers, it also introduces a complex financial question: "How do you turn constant, variable device activities into clear, fair, and scalable revenue?"

Many providers start with flat-rate or subscription-based billing. It's simple to launch, but it quickly becomes misaligned with reality. A simple example is a household sensor that transmits a few readings per day shouldn't be billed the same as an industrial gateway streaming live data 24/7. Static pricing models cause imbalance and make heavy users overconsume, and light users overpay.

As the IoT ecosystem expands, the real challenge becomes monetizing data usage accurately without manual intervention or considering different data sources.

With Zoho Billing, businesses capture real-time device activity and transform it into transparent automated invoices. Let's explore how it works across three popular IoT services.

Scenario 1:  

A utility provider offering smart water and gas meters to homes and offices. Each meter transmits consumption data hourly to the cloud. Residential customers expect fair pricing that reflects their consumption patterns. It's simple, user who uses less pays less and heavy users pay more. Instead of a flat per litre rate, the provider uses volume-based pricing:

• Up to 25,00 litres: $0.002 per litre

• 25,001 to 75,000 litres: $0.0015 per litre

• Above 75,000 litres: $0.001 per litre

 This model rewards conservation and scales naturally across different customer types.

• If a household uses 30,000 litres, it pays: 30,000 x $0.0015= $45

• A small business uses 90,000 litres, pays: 90,000 x $0.001= $90

 The IoT platform transmits usage data via Zoho Billing API, and Zoho Billing automatically applies the right price to each customer based on total consumption. The combination of automated data capture, volume-based billing, and clear invoices builds trust with consumers while scaling effortlessly for utility.

Scenario 2:  

A fleet management company offering GST tracking, route analytics, and driver monitoring for logistics firms. Clients pay a fixed fee per vehicle for access to the tracking system and addon charges if their data usage exceeds the plan limit. The base plan is $20 per vehicle per month, including 1GB of data. For usage over 1 GB, the additional cost per MB is $0.05.

A logistics company with 50 trucks uses 65 GB in total. The average usage is 1.3 GB per truck. So it pays,

Item	Value
Base Fee for 50 trucks (50x20)	$1000
Overage per truck (0.3x 1024 MB x  $0.05)	$15.36
Total Overage ($15.36x50 trucks)	$768
Total Invoice Value ($1000+$768)	$1768

 
The service provider exports usage logs as a monthly CSV file and imports them into Zoho Billing. The billing system applies the base plan inclusions, calculates the overage automatically, and generates a detailed invoice showing per-vehicle consumption.

The model delivers predictable revenue for the business while giving customers full visibility into what they are paying for. This is almost a win-win situation for both clients and the service provider.

Scenario 3:  

A small home security provider offering connected cameras, sensors and cloud video storage to a residential complex. House owners are billed based on multiple metrics, namely, the number of active devices, the number of motion events captured, and the minutes of video stored in the cloud.

The base price for a camera is $5 per month and $0.01 per motion event recorded. For video stored in the cloud, the charges are $0.002 per minute.

If a user has four cameras, 800 motion events, and 15,000 minutes of video pay,

Item	Value
Cameras 4x $5	$20
Motion event 800 x $0.01	$8
Video Storage 15,000 x $0.002	$30
Total Invoice Value	$58

 
The system integrates directly with Zoho Billing's API, transmitting daily usage updates for each customer. Each metric is defined separately, and Zoho Billing aggregates and applies the relevant pricing for each before generating a consolidated invoice.

This ensures billing accuracy and flexibility, even as the business scales to millions of active devices.

Every Connection Counts; Every Count Pays 

In the connected economy, devices never sleep and do not produce data. For IoT providers, success is translating the constant data flow into dependable, transparent revenue.

Zoho Billing makes it effortless. It supports different pricing models and usage-based billing, allowing IoT businesses to bill accurately without the burden of complexity. Whether managing smart meters, connected fleets, or home automation systems, Zoho Billing ensures that every byte, event, and interaction is captured, calculated, and billed accurately.

Usage billing is complex, but not when you use Zoho Billing anymore.

The next post will summarise what we have covered so far, as we cover usage billing and other billing that Zoho Billing offers. Most importantly, we will see the common mistakes businesses make while billing. Stay tuned! 

• Topic Participants

• Hari | Zoho Billing

  

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