How is metered billing calculated in MRR?

Modified on: Thu, 18 Feb, 2021 at 6:23 PM

Scope

Can I add metered charges for MRR calculation?

Can I remove metered charges from the MRR calculation?

Will the usage charges be added for the current month's MRR or next month's MRR?


Summary


There are businesses that use metered billing or usage-based billing for their products/plans.  To know how this is affecting their MRR is crucial from the financial aspect. 



Solution


In the new Product Catalog 2.0, with the new metered billing setting enabled it is possible to add/remove the metered charges to the MRR calculation. 


To add/remove the metered charge in MRR


Go to Configure Chargebee-> Metered Billing  to enable/disable this setting


Click on 'Apply' to publish the changes. 


How will the metered charges be calculated for MRR?


The base fare of the plan will be calculated for the month whereas the usage charges will be calculated for the month of invoicing. 


Example: Recurring Metered plan A has a base charge of $20/month and the subscription starts on 5th Jan. The usage charges are $30 and the invoice for 5th Feb is $50 i.e. $20 (the base charge for Feb) + $30 (usage charge of Jan). 


So MRR for the month of Jan will include only the base charge of $20 whereas MRR for the month of Feb will include $50  ($20 base charge for Feb +$30 usage charge for Jan) 




M
Monica is the author of this solution article.

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