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 Hara Sudhan. S

  

• 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

• Recent enhancements made to workflow rules

  Greetings, I hope all of you are doing well. We're happy to announce a few recent enhancements we've made to Bigin's workflows. We'll go over each one in detail, but for now these updates can be broadly categorized into two parts: Enhancements to workflow

• How do I get my cell height to auto adjust?

  I'm evaluating Zoho Sheet as a replacement for Google Spreadsheet. Using latest version of Safari, and experiencing the same issues in Chrome. A few bugs/things I can't figure out: Auto adjusting cell height when importing from Google Docs or creating a new document Turning off the auto date formatting for X.Y.Z where they are all integers.. (This is extremely important, as our requirements are written as outlines.. "X.Y.Z" corresponds to a requirement ID.. which is then turning into a date) The

• Zia Agent activation in Zoho Desk forces new Organization creation instead of deploying to existing one

  While attempting to complete the deployment and activation sequence of a new Zia Agent within our existing Zoho Desk environment, the activation process failed on the user interface, throwing a generic error (see print). However, despite the activation

• Marketing Tip #36: Optimize your online store for AI search

  Search is changing fast. Along with traditional search engines, AI-powered search and recommendation experiences are becoming a bigger part of how customers discover products online. Stores that are well-organized, descriptive, and consistent are more

• Create a "My saved custom themes" section in Zoho Forms

  Hi! I created lots of forms for my company that we embed on the website with a custon design. It is a pain not to be able to save a custom layout as a template and just not to have to do it again! So could you add a gallery like : "My saved themes" ?

• Automating CRM backup storage?

  Hi there, We've recently set up automatic backups for our Zoho CRM account. We were hoping that the backup functionality would not require any manual work on our end, but it seems that we are always required to download the backups ourselves, store them,

• Zoho CRM Kiosk question – Passing Screen Fields to a Function

  I am building a Kiosk in Zoho CRM to create new Supplier (Vendors) records. Current setup: Screen 1 contains user input fields: Supplier Name (Vendor_Name) First Name (First_Name) I created a Deluge function: createSupplier(vendor_name, first_name) The

• Custom Portal URL causing SAMEORIGIN error with embedded Page snippet

  In my app, I have a page that embeds another page. The URL that I have for the embedded page starts with https://creatorapp.zoho.com but the custom domain I have set up is https://kors.kerndell.com. Because the user logged into the app at https://kors.kerndell.com,

• Introducing Spotlight Forms

  Hey form builders! If someone opens your form, sees the wall of fields ahead, and quietly closes the tab. It may not be because the questions were hard. It could be because the experience felt like too much. Which is why we have now introduced a new form

• Client Script Button in Related List become invalid

  Hi, I am the admin of our organization. And I setup a client script button in related list to raise payment refund request While this button become non selectable recently. I believe there is something wrong from zoho as this button had run for a year.

• BUG and HANGUP - Add Row with Fields DOUBLES the amount of rows instead of Adding Just 1 Row

  As it says in the title, there is a bug with forms generated with Zoho Writer where the Add Row With Fields ends up DOUBLING the amount of rows instead of Adding just 1 row.

• Delivery Note without services

  Hi all, It there a possibility to create a delivery note from an invoice without the listed services "idem type: service"? Thank you in advance, Michel

• Forms cannot be accessed.

  https://forms.zoho.com/ is not available, please help to fix

• Digest Mai - Un résumé de ce qui s'est passé le mois dernier sur Community

  Chers utilisateurs, Un nouveau mois se termine au sein de la communauté Zoho France. Découvrons ensemble un résumé des activités du mois de mai. Quatre ans après son lancement, Zoho Marketing Plus continue d’évoluer avec une ambition claire : offrir aux

• Ability to run report over 180 days

  Is there a reason Zoho limits the ability to run reports for records older than 180 days? In my view, the only reason I can think of is that it forces us to pay for Advanced Analytics (which I do).

• Canvases Auto-Skewing/Adding Scroll Bars When They Were Not There Prior

  Is anyone else noticing rendering issues in their canvases today? It seems to be mainly icons which now have scroll bars added which makes them all look off, though some fields seemed to revert to squished length as well. Were the icons replaced with

• Zoho CRM Integration Form + Custom Fields

  Hi! I've created an Integration Form from Zoho CRM's Vendors Module, but I can choose a few standard fields and no custom fields I've created in Zoho CRM. There is a plan to add this feature soon? Thanks in advance.

• [URGENT] Cannot access Functions tab in CRM

  Navigating to /settings/functions/myFunctions gives this error message: "Sorry, something went wrong. Please try again later." I raised this issue with Zoho Support on Monday (3 days ago) but have not heard back. I'm sure it's clear how important it is

• Important changes to note for Zoho Sign users in Saudi Arabia

  Dear Zoho Sign users, If your Zoho Sign account is hosted in our Saudi Arabia data centre, here's an important update on digital signature certificates in the Kingdom of Saudi Arabia. What's changing Going forward, the "Sign via Zoho Sign" option will

• Cloning a View

  When I clone a View, it doesn't make a copy; it only creates a new copy with the same default fields as if I were creating a new view. What is the purpose of cloning if it doesn't bring in the same fields? Thanks Rudy

• Zoho Desk MCP doesn't expose all functions

  Hello, I'd like to be able to draft (rather than send) ticket replies using Claude Cowork. However, the Zoho Desk MCP doesn't currently offer that, despite it being available in the API (https://desk.zoho.com/DeskAPIDocument#Threads#Threads_DraftEmailReply).

• Number of Reopn

  Hi Zoho, Is there any appropriate API call for This URL "http://support.zoho.com/api/v1/dashboards/reopenedTickets?...." what I thought is the resulting output of this call has data for number of reopen... "https://desk.zoho.com/api/v1/tickets/" + Ticket_ID

• Can I use merge tags with a conditional clause?

  Similar to Mailchimp's "IF / ELSE / ENDIF" functionality, I want to be able to display a sentence with a personalised field only if that merge tag is not empty for the given record. Is this possible on Zoho Campaigns? See http://kb.mailchimp.com/article/how-do-conditional-smart-merge-tags-work for how it works on Mailchimp. Thanks Phil

• Question - why no way to input a 'tool description' and 'tree of 'tools'

  Every business is different, with different business processes. To be truly useful Zoho MCP needs to have user editable tool descriptions (or ruleset) and a 'tool tree' so that the LLM is context aware when being used. For example, the tool description

• Personalize your booking pages with Custom CSS

  Greetings from the Zoho Bookings team! We’re introducing Custom CSS for Zoho Bookings, designed to give you complete control over the look and feel of your booking pages. With this new feature, you can upload your own CSS file to customize colors, fonts,

• CRM API v9?

  v8 has been around for a while. any plans / estimates for v9?

• Associate records via the Multi-select lookup RELATED LIST via API

  In the REST API, is there a way to associate records for a multi-select lookup related list other than via the linking module? There are two methods for the lookup: 1. via insert records API 2. via the linking module ...as described in https://help.zoho.com/portal/en/community/topic/kaizen-125-manipulating-multi-select-lookup-fields-mxn-using-zoho-crm-apis

• Calendar report with order options and more quick view templates

  I think many of us regularly work with calendar-style reports. It would be great to be able to customize the quick view with new templates and have options to sort the entries for each day of the calendar by different criteria. I think this is an interesting

• Kaizen #125 Manipulating Multi-Select Lookup fields (MxN) using Zoho CRM APIs

  Hello everyone! Welcome back to another week of Kaizen. In last week's post in the Kaizen series, we discussed how subforms work in Zoho CRM and how to manipulate subform data using Zoho CRM APIs. In this post, we will discuss how to manipulate a multi-select

• Writer is horrible

  Form filling is about unusable for complex forms! I am so tired of it. GET IT TOGETHER ZOHO.

• Zoho Books and TRAINING SALES receipt label for eTims?

  Hi, Can Zoho Books implement TRAINING SALES receipts and push them to eTims for test? In other words how can we send to Zoho or even create in Zoho training mode invoices and TEST the workflow POS>Zoho Books>eTims and back without actually registering

• Canvas Detail View Related List Sorting

  Hello, I am having an issue finding a way to sort a related list within a canvas detail view. I have sorted the related list on the page layout associated with the canvas view, but that does not transfer to the canvas view. What am I missing?

• Workflow Assistance in Zoho CRM

  Our client's sales team visits customers on-site and currently fills a physical paper form to capture customer details, and then separately re-enters the same data into Zoho CRM via the mobile app — resulting in double data entry. We want the salesperson

• How do I post a new question in Zoho Community forums?

  Hi everyone, I’m new to the Zoho Community and I’m trying to figure out how to properly create and publish a new topic in the forum. When I visit the community page, I can’t clearly find the option like “Add Topic” or “Post Question.” Could someone guide

• Any Zoho Books users in the Kenyan Hospitality industry? How to set service items for eTims?

  Hello, We are opening a coffee shop in Kenya and would like to know if there are any Zoho books users in hospitality service industry in Kenya? We would love to know: 1. how do you cope with the absence of the mandatory Tourism Levy 2% tax option? 2.

• Cloning Item With Images Or The Option With Images

  Hello, when I clone an item, I expect the images to carry over to the cloned item, however this is not the case in Inventory. Please make it possible for the images to get cloned or at least can we get a pop up asking if we want to clone the images as

• Zoho Books | Product updates | May 2026

  Hello users, We're back with the latest updates and enhancements we've rolled out in Zoho Books. From sales tax automation to scanning receipts for free, explore the updates designed to upgrade your bookkeeping experience. Sales Tax Automation [US & Canada

• Blueprint Not Triggering When Lead Status Is Updated by Workflow (IndiaMART Integration)

  I have set up a blueprint that triggers when a lead’s status is “New Lead.” Our CRM is integrated with IndiaMART, and when leads are created from IndiaMART, their Lead Status is initially set to None. To handle this, I created a workflow that automatically

• Zoho Books | Product updates | June 2026

  Hello users, Welcome to this month's roundup of what's new in Zoho Books! We have an exciting line-up this time. The highlight is the launch of the all-new France Edition with full ISCA compliance. We're also introducing features such as Layout Rules

• [Product Update] Locations module migration in Zoho Books integration with Zoho Analytics

  Dear Customers, As Zoho Books are starting to support an advance version of the Branches/Warehouses module called the Locations module, users who choose to migrate to the Locations module in Zoho Books will also be migrated in Zoho Analytics-Zoho Books

• Next Page