Billing Management: #6 Usage Billing in SaaS

Imagine a customer shuffling across multiple subscriptions, a streaming service, a music app, cloud storage, and a design tool. Each one charges a flat monthly fee, regardless of how much or how little they use. Some months, the customer barely opens the subscriptions, yet the bill is the same. This is what we call subscription fatigue, meaning resistance from the customer towards fixed, recurring charges that don't match their actual usage.   

For SaaS, subscription fatigue is more than a buzzword. It's a business risk as a flat rate may appear overcharging for one, but others enjoy paying less for their high usage. This imbalance leads to churn, lost revenue and customer grievances.

The solution lies in usage billing, where the customer pays based on what they consume. By aligning cost with value, businesses can increase fairness and unlock sustainable growth. While the principle is simple, it requires a reliable way to track and monetise usage properly.

Zoho Billing Makes Usage Billing Seamless

Zoho Billing provides SaaS businesses with all the tools needed to implement usage-based pricing effectively. Key capabilities that Zoho Billing offers that work effectively for SaaS businesses include:

• Flexible Pricing Tiers: Businesses can create multiple plans with different prices and list them on their websites for direct signup.

• Zero value Plan: For charging customers purely based on usage alone, businesses can create $0 value plan and associate usage addons to charge appropriately.

• Addons: Attach both flat-rated addons and usage-based addons to the subscription.

• Hybrid Model: Combine a flat subscription fee with usage-based addons to monetise additional consumption fairly.

When a usage addon is attached to a subscription, Zoho Billing ensures that usage is tracked, recorded and billed accurately.

Scenario 1:

Sam runs a small consulting firm and uses a mailing application to communicate with his clients. His plan costs $200 and includes 500 GB of storage. Sam stays within the limit most months; however, with many attachments, proposals and reports during a particular month, his mailbox usage exceeds by another 100 GB. The mailing application provides a usage addon for $0.50/GB for the additional usage instead of offering a rigid higher value plan.

Item	Value
Base Subscription	$200
Included Invoices	500
Actual Usage	600
Extra Usage	100
Unit Price for Extra Usage	$0.50/GB
Additional Charge	$50
Total Invoice Value (Base Price+Added Usage)	$250

The billing team records the extra 100 GB usage in Zoho Billing using the manual usage entry method and nothing more. The system automatically calculates $50 overage fee and appends it to the invoice to make the renewal invoice for the period $250.

Scenario 2:

Imagine Smith Enterprise uses a cloud analytics SaaS product. The contract covers a base subscription plan and two usage add-ons: API calls and storage. The base plan costs $500/month and includes 100,000 API calls and 500 GB storage. For every API call they make, an extra $0.01 per call will be charged. Similarly, for extra storage, $0.10 will be charged per GB. 

During a particular month, the company consumes 250,000 API calls and 750 GB of storage, clearly above the usage limit. A subsequent invoice is created, and the charge based on the usage data is added to the base subscription value.

Addon 1		Addon 2
Item	Value	Item	Value
Included API Calls	100,000	Includes Storage	500 GB
Actual Usage	250,000	Actual Usage	750 GB
Extra Usage	150,000	Extra Usage	250
Unit Price	$0.01/call	Unit Price	$0.10/GB
Additional Charge	150,000x$0.01= $1500	Additional Charge	250x$0.10= $25

 

Item	Charges
Base Subscription	$500
API Call Overage	$1500
Storage Overage	$25
Total Invoice	$2025

The company exports the API call logs and storage usage data into a CSV file that can be imported into Zoho Billing. Zoho Billing digests both records, applies the pricing rule separately for each add-on, and generates a consolidated invoice.

Scenario 3: 

Roy runs a digital marketing agency offering various marketing campaigns across social media platforms. Roy owns a SaaS application that generates posts and charges $1.5 per post design. No fixed base price for this, but their clients are purely charged based on the number of posts made. During festive sessions, Roy's team schedules a maximum of 450 posts for a client.

Item	Value
Base Subscription	$0
Rate per post	$1.5
Actual Usage	450 posts
Total Invoice Value ($1.5x450)	$675

 

Using Zoho Billing, Roy records the usage manually or by importing them into the system. With no base price, the platform automatically calculates the total invoice based on the usage. Roy receives a clear invoice for $675, reflecting the value consumed.

SaaS Usage Billing Simplified

Usage Billing ensures that customers pay only for what they consume, whether extra storage, extra API calls, or purely based on the number of posts made. With Zoho Billing, SaaS businesses can seamlessly manage complex and straightforward usage billing scenarios. Adding usage to Zoho Billing is simplified through different methods. It can be added manually if there are fewer subscriptions, and usage data can be imported if there are more subscriptions and usage add-ons. Usage can also be pushed using APIs into Zoho Billing.

Post your use cases in the comments and find the best way to handle them using Zoho Billing.

Next, we will dive into Usage Billing in Telecom and Internet Service Providers, showing how this model powers those sectors. 

• Topic Participants

• Hari | Zoho Billing

  

• Sticky Posts

• 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's

• Community 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 you

• Community 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 most

• Introducing: 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

• Recent Topics

• Enable Sync of SalesIQ Article Interactions to Zoho Analytics for Unified Knowledge Base Reporting

  Dear Zoho SalesIQ and Zoho Analytics Teams, Greetings, We’d like to formally request an enhancement to enable SalesIQ article interaction data to be synced with Zoho Analytics, so that we can obtain a unified view of our knowledge base performance metrics

• How to enter membership share, sold or reimburse

  Hello, First, I am just begining taking care of the accounting of my organisation, and new also to Books. In Books, our accounting plan has an account #3900 - Share capital, that cumulates the share our member pay. How do I write a sale or a reimbursement

• Ability for me to take the issued PDF certification on successful completion of a course then push to zoho sign in order that it is digitally certified

  How can I take the issued PDF certification on successful completion of a Zoho Learn course then trigger a workflow to push to Zoho Sign in order that it is digitally certified, hosted on the blockchain and then push to Zoho Workdrive to be hosted off

• Candidates rejection process

  Is there a way to get ZOHORecruit to automatically send out an email to candidates that are rejected?

• Multi file upload

  Hi, I just wonder if one could upload multiple files in one shot, say between one and three files, without adding multiple File Upload fields? Thanks, Alalbany

• Passing the image/file uploaded in form to openai api

  I'm trying to use the OpenAI's new vision feature where we can send image through Api. What I want is the user to upload an image in the form and send this image to OpenAI. But I can't access this image properly in deluge script. There are also some constraints

• Calendar Year View?

  Is there a way I can view the calendar in year view? Maybe create a page with a view like this?

• ABN Amro

  Hi, We are trying to add Abn AMRO as a bank in Zoho Books. However we get the following error: Type of Error: User Action Required Description: The request cannot be completed because the site is no longer supported for data updates. Possible workaround: Please deactivate or remove the account. Suggested Action: The site will no longer be supported by Zoho Books and should be removed. Does that mean it's no longer supported? Thanks!

• Add bank transfers via a webhook or API

  Hello ZOHO Books Community, is there anyway to add single transactions to bank accounts via an API or webhook? I found in docs to upload a bank statement. But i want to add a transaction from an external (unsupported bank) in the moment there is a transaction

• Books does not allow 19% tax rate for invoice - Please help!

  Hi there, I need to do an import of invoices into Zoho Books. The process worked smoothly before we migrated to the Books Germany Edition in December 2024. It does import 13 out of 14 invoices from my csv-file. For the one it does not import I get the

• When will Zoho Books offer native NFS-e issuing, now with Brazil's National Standard?

  Hello Zoho Team and Community, I'd like to follow up on my previous suggestion regarding the critical need for Zoho Books to natively issue Brazilian Service Invoices (NFS-e). My original idea was that this could be achieved by extending the same integration

• Admin Access to Subscriber Information for System/Default Bots in Zoho Cliq

  Dear Zoho Cliq Team, Greetings, We would like to request an enhancement to Zoho Cliq's bot management capabilities. Specifically, we are asking for the ability for organization administrators to view the list of subscribers for system/default bots, such

• zoho webmail keeps opening an empty tab when on log in/vist webmail

  as the the title says, whenever i log in or visit the page in a new tab, zoho webmail with open a new tab, but it errors out (see attachment). how do you stop it from doing this?

• FSM work order creation on books quote approval

  I have followed https://help.zoho.com/portal/en/kb/fsm/custom-integrations/zoho-books/articles/perform-actions-in-zoho-fsm-on-estimate-approval-in-zoho-books#Step_1_Create_a_connection_for_Zoho_FSM_in_Zoho_Books in order to create a work order in FSM

• Tip of the week #46 - Stay more organized by moving threads between inboxes

  Have you ever come across a thread in your inbox that should have been handled by a different team or inbox? Or maybe you've wrapped up your part of the conversation, but another team needs to step in to finish the task or assist further? Keeping such

• Text summarization and field detection with Zia, Zoho's AI assistant

  Have lengthy documents that take forever to read and sign? Tired of placing fields into hundreds of pages? Here's a single solution to solve both challenges: Zia, Zoho's AI assistant. With Zia's integration with OpenAI, you can summarize long documents

• Sending Links to Functions in CRM

  Maybe I'm crazy, but currently there's no way to send someone a link to a custom function. The only link you can get is to the myfunctions page, which is very frustrating. This should work like workflow rules where when you click on one, it should have

• zohoからの自動メールについて

  zohoからの自動メールにおいてちょっと困ったことが起こっており、サポートにも相談中なのですが ほかの方にも同現象が発生していないか相談したい。 ▼事象 zohoからの自動メールにおいて時折「このメールが送信者からのものであると確認できないため、このメールに安全に返信できない可能性があります」とメーラーから警告が出る。 ▼状況 発信元：設定した独自ドメイン SPF/DKIM設定：済 利用メーラー：outlook 発生頻度：稀（連続するときもあるが、パタッとでなくなる時もある） サポートへの連絡：ただいま継続相談中

• Using Deluge scripting to create/update data in TabularSections

  I am having following Form structure with some other usual fields, and a tabular section which allows putting question, self rating and lead rating. (pic below) I am trying to create a record of this form via Deluge, but can't figure out way to populate

• Zoho Recruit: How to link lookup fields using record ID instead of name during import?

  Hi, I'm having an issue with lookup fields in Zoho Recruit during data import. When I import records into a module that includes a lookup field (e.g., to an Interview record), Zoho Recruit matches the lookup by the display name (string) instead of the

• Add a "Success" Route to the "Forward to Operator" Card in Zobot

  Hello Zoho SalesIQ Team, We hope you're doing well. We would like to request an enhancement to the "Forward to Operator" card in Zobot. Current Limitation: At present, the "Forward to Operator" card provides the following routes: Operator Not Available

• Power of Automation :: Auto-update Project status based on Tasklist completion

  Hello Everyone, A Custom function is a user-written set of code to achieve a specific requirement. Set the required conditions needed as when to trigger using the Workflow rules (be it Tasks / Project) and associate the custom function to it. Requirement:

• Multi Module Lookup Fields

  🎯 Use Case: In many custom implementations, especially those involving financial tracking, service operations, or project-based work, a single record (e.g. an invoice or bill) often relates to one of several different modules — but only one at a time.

• How to Download a File from Zoho WorkDrive Using a Public Link

  How to Download a File from Zoho WorkDrive Using a Public Link If you're working with Zoho WorkDrive and want to download a file using a public link, here's a simple method to do so using API or a basic script. This approach helps developers or teams

• Facturation électronique 2026 - obligation dès le 1er septembre 2026

  Bonjour, Je me permets de réagir à divers posts publiés ici et là concernant le projet de E-Invoicing, dans le cadre de la facturation électronique prévue très prochainement. Dans le cadre du passage à la facturation électronique pour les entreprises,

• Introducing AI Modeler—a no-code approach to adding AI to your business applications

  Forward-thinking businesses today are embracing AI to make life easier for themselves, their employees, and their customers. But if you haven't started yet, you might be concerned that your business will be left behind. Or maybe you're worried because

• Tip #20 - Three things you probably didn't know you can do with picklists

  Hello Zoho Sheet users! We’re back with another quick tip to help you make your spreadsheets smarter. Picklists are a great tool to maintain consistency in your spreadsheet. Manually entering data is time-consuming and often leaves typos and irregular

• Zoho People how do i view the history of leave taken

  Hi All What is the report that i am unable to view the history of the leave taken for an individual and team?

• UK Registration for VAT with existing stock/inventory

  We have an existing inventory of stock and are investigating how to handle the conversion from a UK VAT unregistered company to a UK VAT registered company. Enabling VAT registered status looks extremely easy, but we cannot find any way within Books to

• Trigger action after workflow

  I would like to trigger a deluge function after the approval workflow is complete. Is this possible? The objective is to take the approved document and move it over to Zoho Contracts to send out to our customer for review and signature. The reason we

• Is it possible to create a meeting in Zoho Crm which automatically creates a Google Meet link?

  We are using Google's own "Zoho CRM for Google" integration and also Zoho's "Google Apps Sync" tools, but none of them provide us with the ability to create a meeting in Zoho CRM that then adds a Google Meet link into the meeting. Is this something that

• Unable To Enable Google Calendar Sync

  Hi Folks, I am unable to enable google calendar sync. I get Internal Error, Problem Occurred Internally. Screenshot attached. How do I solve this?

• Export to Zoho CRM Not Triggering Workflow Rules

  Hello, I have set up an automated export from DataPrep to Leads in CRM but none of my Workflow Rules are triggering once the leads are created. The Timeline history is completely empty in every lead. How can I fix this issue? Do I need to set up a Schedule

• 【Zoho Projects】サンドボックス機能（テスト環境）リリースのお知らせ

  本投稿は、本社のZoho コミュニティに投稿された以下の記事を参照し作成したものです。 Sandbox - Your Secure Testing Space in Zoho Projects ユーザーの皆さま、こんにちは。コミュニティチームの中野です。 本投稿では、Zoho Projects のサンドボックス機能リリースについてご紹介します。 サンドボックス（テスト環境）とは？ Zoho Projects の「サンドボックス」は、新たな設定を作成、検証、そして既存の処理を妨げることなく本番環境に適用することができるテスト環境です。

• Sending from domain alias

  In the Control Panel/Domains, I have set up some domains as aliases for my main domain. Only my main domain has mail hosting. The other domains are verified as aliases for the main domain, and emails sent to <user>@<alias domain> arrive successfully at

• Difficult to Purchase More users

  It's surprisingly difficult and un-intuitive to purchase more user licenses in Zoho One under the new UI. It's not actually possible to do it anywhere from the admin interface. You have to leave the admin/directory section, then click your profile icon,

• How to link web sales payments through Stripe to invoices?

  I have just set up an online shop website which accepts payments through Stripe.  The payment appears in Zoho Books through the Stripe feed as 'Sales without invoices'.  In order to keep Zoho Inventory in step, I manually (for now) create a Sales Invoice

• Announcing New Features in Trident for macOS (v.1.22.0)

  Hello everyone! Trident for macOS (v.1.22.0) is here with thoughtful updates to improve your daily workflow. Here's a quick look at what's new. Switch email response type easily. You can now switch between Reply, Reply All, and Forward directly in the

• Layout Rules / Quick create

  Hello, is there a way to create a layout rule for quick create option? Regards, Katarzyna

• Zoho Notebook Will Not Open After App Install

  I am a new user of Notebook. I was able to successfully import my data from Evernote and the product is working well on a Windows 11 computer and Pixel device. I have also installed Notebook on a Samsung S6 lite tablet however the software freezes on

• Next Page