Invoicing for consumption-based pricing models

We support a wide variety of billing metrics and units of measure including time-based (e.g. $ per hour of use), transaction-based (e.g. $ per API call), volume-based (e.g. $ per GB of data), and count-based ($ per connected device).  Ordway’s product catalog offers native support for single-rate, volume, and tiered discounting models.  You can sign up customers for pay-as-you-go monthly plans or longer-term, annual contracts with prepaid usage, monthly minimums, or spend commitments.   Ordway also offers a number of ways to calculate the “billable usage quantity.”  We can simply count units consumed or use methodologies such as high water mark or percentile billing.

Usage-based billing software generates invoices for based upon the quantity of your product a customer actually consumes. Charges are typically computed by multiplying the quantity of units (q) consumed by the per unit price (p).  For example, suppose customer may pay $1.00 per hour for access to a cloud computing platform.  To determine, the monthly charges the usage-based billing software would calculate the number of hours that the service was consumed (e.g. 100 hrs) during the billing period and multiply it by the per unit price (e.g. $1/hr) to arrive at the line item charge (e.g. $100).

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Customer’s consumption is metered in your software in real-time.  At the end of the month (or more frequently), you can upload the metered consumption data to Ordway.  The consumption data is fed into our rating engine, which will compute the charges in two steps.  First, we determine the “billable usage quantity” accounting for free/included units, prepaid, minimums, and others.  Second, we determine what the appropriate per unit price to charge is based upon the contract terms, discount schedule, and pricing.  The quantity and the price are multiplied (p x q) to arrive at the line item charge for the period.  

Usage charge line items are then inserted into the customer’s invoice along with the current outstanding balance, sales taxes, and any other fixed or variable charges.  We distribute the invoice electronically to the customer, who can pay the bill via credit card or bank transfer (ACH, wire, check).

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Ordway offers three ways to import metered consumption data into our billing system.  First, you can enter individual usage records in via our user interface (recommended only for small volumes).  Second, you can upload a CSV file with usage via our bulk import utility.  Third, you can post the metered consumption data with our API.  

With the API, you can stream metered data in real-time or batch upload at a regular frequency (once per day, week, or month).  The APIs allow you to post individual usage records or upload in bulk.  We also have APIs for updating, deleting, listing, and retrieving usage records. 

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Yes, Ordway can automate much of the five-step process to recognize revenue under the ASC 606 (US GAAP) and IFRS 15 (international) standards.  Most customers elect to recognize revenue based upon the actual invoiced amounts each month.  Journal entries are created and posted to Ordway’s revenue sub ledger.  At period end (or on a continuous basis) Ordway can publish summary journal entries to your general ledger.  We integrate with many of the popular accounting and ERP applications including Quickbooks, Xero, Sage Intacct, and Oracle Netsuite.

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