Usage-based billing models have transformed the subscription economy, providing flexibility and scalability that traditional pricing structures simply can’t match. But with this shift comes a new layer of complexity. Billing, which was once a straightforward operational task, must now accommodate tiered pricing, usage patterns, dynamic thresholds and a wide range of other variables. This not only makes it difficult to produce accurate and timely bills, but it also complicates your processes within Salesforce’s Revenue Cloud Advanced (RCA) solution, formerly Revenue Lifecycle Management (RLM).
Salesforce RCA is a comprehensive solution within the Salesforce platform that combines features like Configure, Price, Quote (CPQ) and subscription management, allowing businesses to manage their entire revenue lifecycle within Salesforce itself.
While Salesforce excels at sales and customer management and ERP systems like NetSuite handle financial operations well, billing often falls into a gap between the two. If your business relies on usage-based revenue, this gap has the potential to create inefficiencies, errors and scalability issues throughout the quote-to-cash (Q2C) process.
In this article, we’ll explore how billing has evolved into the missing link in the revenue lifecycle, why automation is critical for usage-based billing models and what an integrated approach to billing can do for your business.
Usage-based revenue complicates billing and the lifecycle of end-to-end revenue management
Usage-based and hybrid revenue models are becoming the gold standard for SaaS and other subscription-based industries. According to OpenView, 61% of SaaS businesses offered usage-based pricing in 2023, up from 45% in 2021. But these models are anything but simple. Gone are the days of flat fees or fixed monthly pricing. Modern billing structures must account for:
- Dynamic usage patterns: Pricing tied to real-time metrics such as API calls, gigabytes used or impressions served
- Complex pricing tiers: Volume-based or tiered pricing models that adjust rates based on consumption levels or time of day
- Prepaid credits: Consumption-based pricing deducted from upfront payment credits
- Pooled or grouped usage: Aggregating usage across multiple users, departments or even subsidiaries
- Contract amendments: Adjustments for mid-cycle changes like upsells, downgrades and proration
In our experience, the only constant in usage-based pricing is change. For most companies, what starts as a simple monthly pricing model quickly evolves into multiple dynamic billing structures that are linked to customer utilization. Here are just a few examples of real-world usage-based pricing models we’ve seen and the billing complexities they create:
Figure 1: Usage-based pricing model examples
In usage-based models like these, billing has become a dynamic process that requires sophisticated automation and integration. If your business relies on disparate systems or fragmented workflows to support them, you may have already noticed billing delays, revenue leakage or poor customer experiences – and you’re likely having some trouble tracking and recognizing revenue throughout your AR (accounts receivable) processes.
The gap: Where CRM and ERP systems fall short
Despite its importance, billing often falls into the space between your customer relationship management (CRM) and enterprise resource planning (ERP) platforms. Each system is designed to solve a specific set of problems, but neither fully addresses the complexities of usage-based billing. That’s why many businesses have opted for standalone billing systems and spreadsheets – but those approaches only add to your data silos and leave you toggling between platforms.
Figure 2: The billing gap between today’s CRM and ERP systems
We believe the most efficient way forward is to embed key billing functions directly into your ERP so your financial software can handle critical general ledger (GL) postings for transactions like invoices, deferred revenue and revenue recognition. However, even the most advanced ERPs lack a scalable, automated solution for usage-based billing.
The missing link: integrated, automated billing for usage-based models
To manage usage-based revenue effectively, we recommend billing solutions that automate the complexities of modern pricing models and are built into your ERP. ZoneBilling, for example, combines the power, flexibility and sophistication of a standalone billing system with the convenience of being embedded directly within NetSuite. This helps you with:
- Real-time data flow: Syncs data across CRM and ERP systems to eliminate silos and streamline invoicing, revenue recognition and tax compliance.
- Subscription and contract management: Translates customer quotes into dynamic subscription records, complete with usage tracking and billing configurations.
- Usage-based calculations: Handles advanced models like tiered pricing, pooled usage and overage fees without manual intervention, improving billing accuracy.
- Amendments and proration: Easily adapts to mid-cycle changes like product swaps or usage adjustments.
- Multi-entity invoicing: Supports consolidated billing for large enterprises or hierarchical billing structures.
An embedded billing platform normalizes raw usage data – so it aligns with the quotes, orders and contracts in your CRM and the invoices, payments and general ledger entries in your ERP. To make this process routine and repeatable, your billing platform needs two key capabilities: data mediation and rating.
Data mediation and rating: Must-haves for usage-based billing
Data mediation and rating are two critical steps that help you process and monetize usage data effectively. If your CRM and ERP systems cannot perform these functions automatically and efficiently, it’s likely creating an operational gap.
Without getting too technical, data mediation takes raw data from usage logs (e.g., API calls, storage consumption or minutes used) and converts it to the billing units you’ve established. For example, if a customer uses 10,000 emails but pricing is structured per 1,000 emails, data mediation divides 10,000 by 1,000 to account for 10 billing units.
Rating applies pricing logic to the billing units to calculate the charges. In a tiered storage model, for example, the first 2 TB used is billed at $5, while each additional TB is billed at $10. This pricing logic gives you the flexibility to account for pricing thresholds, as illustrated in the example above, and to modify pricing while keeping your billing units as-is.
An automated billing system performs data mediation and rating accurately, consistently and in real-time, so you can:
- Handle high volumes of usage data and billing calculations efficiently – without your team’s intervention
- Support complex pricing scenarios – such as minimum commitments, overages and prepaid services
- Ensure all usage data is accurate before generating invoices – reducing errors and disputes
Without automating mediation and rating, you’d have to rely on fragmented processes or piecemeal solutions that require your teams to toggle between systems or use spreadsheets to calculate bills. This isn’t just inefficient – it opens the doors to billing delays, errors and revenue leakage. As usage-based models grow in complexity, robust mediation and rating capabilities are becoming a must-have for your billing system and a core component of a streamlined end-to-end revenue management process.
ZoneBilling: Bridging the gap in Salesforce RCA for usage-based pricing models
ZoneBilling serves as the engine that powers seamless revenue lifecycle management by addressing every step of the billing process. This native SuiteApp is embedded into NetSuite and integrated with CRM systems like Salesforce and its RCA solution to eliminate silos, reduce complexity and empower your business to handle even the most advanced usage-based billing models with ease.
Figure 3: The end-to-end revenue management process
At the heart of ZoneBilling is its ability to unify and optimize the entire revenue management process. Let’s take a closer look at each stage and the benefits it delivers.
- Subscription and contract management:
- Easily create subscription models to handle complex billing, usage and pricing
- View all history of a client from one record/contract. See invoices, usage, changes, etc.
- Seamlessly handle change orders, amendments and returns/credits
- Report on active contracts, usage, invoices, renewal dates and more
- Data mediation and dynamic rating:
- Using Zone APIs, automatically load usage data into a custom table in NetSuite
- Leveraging custom records to capture customer-specific usage data points
- Query custom records and usage data using saved searches to process it for invoicing
- Billing operations:
- Process invoices using the standard native invoice record
- Generate a sales order for items that need fulfillment
- Leverage native SuiteTax or SuiteApp partners for tax calculations
- Easily navigate from the invoice to its associated subscription or contract in NetSuite
- Automatically consolidate multiple subscriptions across multiple customer accounts onto a single invoice record
- Collections:
- Leverage NetSuite’s compatibility with dozens of leading payment processors
- Use native NetSuite functionality for payment processing
- Leverage several SuiteApps for dunning and accounts receivable (AR)
- Create automated collections email notifications using workflows or reminders in NetSuite
- Revenue operations:
- Leverage native NetSuite ARM
- Comply with ASC606 and IFRS15
- Apply flexible revenue recognition rules such as straight line, upfront or event-based rules like fulfillment, milestone and percent complete
- Automatically sync cancellations, upsells, downsells, extensions and other contract amendments with ARM
- Auto-merge and re-allocate revenue using retrospective or prospective methods
- Manage bundles, packages or kits and allocate revenue amongst the components
- Apply detailed revenue and deferred revenue waterfall reporting and metrics
- Renewal automation:
- Leverage your CRM or configure, price, quote (CPQ) platform to send renewal contracts into NetSuite or let NetSuite auto-renew contracts for you
- Support evergreen, extensions, new contract lines or entirely new subscriptions
- Create renewal templates to schedule uplifts, change terms or perform (de)escalations in quantity, price, discount or rate.
- Connect with the Bureau of Labor to store CPI rates directly within NetSuite
- Configure reporting and alerts for upcoming renewals
Why choose ZoneBilling to accompany Salesforce RCA?
ZoneBilling isn’t just a billing platform – it’s a comprehensive solution designed to scale with your business. Built entirely on the NetSuite platform, it eliminates the need for third-party integrations and application silos while providing:
- Unified data: Seamlessly connects Salesforce CRM and ERP workflows, ensuring consistent data across systems
- Scalability: Adapts to dynamic usage-based models and complex global operations
- Efficiency: Reduces manual effort and billing errors through automation
- 15+ years of expertise: Reflects over a decade of expertise in subscription management and billing solutions
By focusing on the entire billing cycle, ZoneBilling bridges the gap between sales, billing and finance, turning a traditional bottleneck into a strategic advantage for your business.
Conclusion
In today’s subscription-driven economy, billing is no longer just a backend task – it’s the missing link in effective revenue management. Usage-based models have raised the stakes, creating variables and complexities that, left unchecked, can derail the billing process, bog down your team and frustrate customers.
To succeed, you need an integrated billing strategy that bridges the gap between your CRM and ERP systems to create a friction-free process through which usage-based revenue can flow. If you’re struggling with the complexities of usage-based billing, talk to one of our specialists today to find out how ZoneBilling can help.
