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    Sachin Mistry
    Subscription Management Pricing Use Case - Mininum Monthly...
    Topic posted June 20, 2019 by Sachin MistrySilver Medal: 2,000+ Points, tagged Pricing 
    20 Views, 2 Comments
    Title:
    Subscription Management Pricing Use Case - Mininum Monthly billing with tiers
    Summary:
    Subscription Management Pricing Use Case - Mininum Monthly billing with tiers
    Content:

    Below is a common use case around billing and invoice regarding our Business Provider Partners (Our company Pays) and Business Receiver Partners (Our Company Collects) following the usage model. There can be many variations to these.

     

    Use Case description

    ----------------------------

    A) APPLIES EQUALLY TO PAY/COLLECT

     

    Pricing Plans

    ==========

    There are daily/monthly per user level caps. These are dollar based caps. Our User will be charged fixed amount per day or per month if the dollar based ceiling is reached regardless of the usage. If end user usage on a day does not reach the cap amount, they are charged for amount they use. This could be less than the cap amount. But if they overuse, they are charged the ceiling amount.

    Billing Process

    ============

    CALCULATE BY USER BY DAY

    By user by day calculate daily amount due ( rate based on usage * unit rate). If this daily amount is less than cap, use this amount. If it is more than cap amount use the capped amount. It is possible the contract with partner to not have cap and everything is based on as used basis.

     

    Sum these amounts for all users.

     

    APPLYING PARTNER LEVEL MINIMUMS

    If the total is less than the monthly minimum then bill the monthly minimum overriding the calculated amount.

    If the total is more than the monthly minimum bill the calculated total.

     

    BILL THE FINAL INVOICE AMOUNT

    Example

    By user

    Apply rate of $0.01 per MB per day with ceiling of $10/Day. If the user uses 2000MB, then charge only $10/Day.

    If they use 500MB then charge $5/day

     

    There can be daily, weekly, monthly and annual partner level minimums. These are dollar based minimums. Our compnay is obligated to pay those minimum amount to the partner regardless of cumulative usage by our Users on partner network.  

    For this partner, we have commercial agreement which dictates, we will be billed minimum $50,000 per month.

     

    Say we have 1000 users for this partner and in aggregate their total monthly dollars come to (1000*30*1) = $30,000. We get billed for $50,000 and our internal system should take greater of $30,000 and $50,000.

     

    Now for another month we have 1200 users for this partner and in aggregate their total monthly dollars come to (1200*30*2) = $72,000. We get billed for $72,000 and our internal system should take greater of $72,000 and $50,000.

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