Usage-Based Billing FAQs

Monthly minimums can reshape how usage-based billing performs. This guide breaks down the calculation steps, the risks finance teams watch closely, and the example most teams use to validate the model.

When a customer changes their subscription mid-cycle—upgrading, downgrading, or switching tiers—you'll need to calculate prorated charges or credits and reflect those adjustments on the upcoming invoice.

Billing is typically triggered by project phases, time logs, or completion events and handled separately from recurring software subscriptions.

Billing platforms handle proration and billing adjustments by automatically recalculating charges when subscriptions change mid-cycle—such as during upgrades, add-ons, or plan changes.