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An Introduction to Usage Billing

By Matt / December 6th, 2019

WHMCS 7.9 introduces support for Usage Billing.

Where traditionally WHMCS has been a billing system that catered primarily to fixed price ahead-of-time subscription based billing, with Usage Billing, you can bill your customers for what they consume, after they have consumed it. This opens up many new possibilities for new products and services, as well as for pricing of existing products and services in new more flexible and creative ways.

What is Usage Billing?
Usage Billing is the process of billing a customer for what they use and consume. If you have a mobile/cell phone or pay utility bills, then you're probably already very familiar with how Usage Billing works:
  • You use a product or service
  • The company providing the product/service measures your consumption
  • The amount you pay varies depending upon your usage
In many cases, there is often a base amount plus the charges for what you've used in the most recent complete period.

Usage Billing is also sometimes referred to as Metered Billing or Pay-as-you-go Pricing.

Why does Usage Billing matter?
Usage-Based Billing is becoming more and more common in the web hosting space as more and more web hosting companies start charging customers for what they consume, such as the data transfer used in a given period or for the uptime of a virtual machine or server.

Usage Billing can often make a lot of sense for hosting related products, where usage can vary widely from user to user, and where usage consumption has a direct impact on the cost of providing the service. Where traditionally services have had to be offered at a one price fits all based on the average user consumption, with Usage Billing, you can charge people for exactly what they use which feels more fair to consumers.

How does Usage Billing Work?
The new Usage Billing functionality is being made available in WHMCS via provisioning modules. Any product assigned to a provisioning module which supports Metric Usage reporting will now allow admin users to enable Metrics for billing and set pricing for them.

Metric collection is performed by default twice daily, and the latest Metric measurement values are always displayed to admin level users, regardless of whether billing is enabled, giving you insights into resource usage and consumption within WHMCS regardless of if you choose to bill your customers based on that usage.

Usage for metrics can be reported in one of two formats:
  • Snapshot - where the usage can be measured and billed for at any given point in time, but for which usage never resets. Things such as disk space, number of MySQL database, number of email accounts are all examples of Snapshot metric types.
  • Time Based - where the usage is measured over a given period of time and resets to 0 at the end of the billing period. Bandwidth is an example of a measurement that is typically measured by month, and resets to zero at the end of each month.
Pricing for Metrics is defined in pricing brackets. This enables you to provide pricing that varies based on the total amount of consumption.
Example Use Cases
The following are some example use cases for Usage Billing - there are many more:
  • To offer web hosting packages where users pay based on the disk and bandwidth resource usage they consume
  • To offer web hosting packages where a set GB amount of bandwidth is included, and users are charged for any usage over the included amount
  • To offer web hosting packages where there is an additional fee for each Addon Domain that is added within the web hosting control panel
  • To offer reseller hosting packages where the cost of the reseller hosting is dependant upon the number of hosting accounts created under it
We're really excited about the possibilities that Usage Billing creates for our users. With the Usage Billing functionality in WHMCS 7.9, you have access to a flexible and powerful system of billing for usage that will allow you to evolve and grow your product offerings and help you to address industry changes.

This is just one of a number of peices of work that together are about creating a more powerful billing platform that caters to and accommodates newer and more moden ways of billing, and allows our customers to continue to evolve and grow their product offerings.

We invite as many people as possible to try out the new Usage Billing functionality available in WHMCS 7.9. You can download and try the Beta today, and module developers can begin implementing Metric Billing support into your custom modules using the Developer Documentation available here.

Next week, we'll take a deeper look into how Usage Billing works and some of the possibilities for it, but until then, we have lots more information available in our Documentation and if you have any questions, we invite you to ask them in the comments below.

Thanks for reading!

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