Bookings vs. Billings in SaaS: Complete Guide

Running a subscription-based business means you need to understand bookings, billings, and revenue. These metrics are crucial for accurate financial reporting and forecasting, but they're often confused. Bookings give you a glimpse into future revenue based on signed contracts. Billings show the actual invoices sent to customers and expected short-term cash flow. And revenue? That's the money you've actually earned. This guide clarifies these key SaaS metrics, explaining their calculations and offering practical examples. We'll also cover common misconceptions and best practices so you can use these insights for strategic growth.

Key Takeaways

• Bookings, billings, and revenue tell a complete financial story: Bookings show potential future revenue from closed deals, billings indicate what's been invoiced and expected cash flow, and revenue reveals actual money earned. Together, they provide a complete financial picture.
• Modern pricing models require sophisticated billing infrastructure: According to a 2024 industry report, 61% of SaaS companies have shifted away from flat-rate pricing to more dynamic billing models, aiming to better align revenue with customer value and usage . This shift demands robust metering and billing automation to handle complex pricing structures accurately.
• Automated billing operations eliminate discrepancies: Modern billing platforms process high-volume usage data in real-time, ensuring bookings translate into accurate billings while reducing revenue leakage and manual errors.

What Are Bookings?

Understanding the difference between bookings and billings is crucial for managing your business' finances, especially for subscription-based companies. Let's start by defining bookings.

Defining Bookings

Bookings represent the total value of signed customer contracts, regardless of when you receive payments. Think of bookings as a handshake—a commitment from your customer to pay for your product or service. It's a forward-looking metric that provides insight into your future revenue stream.

For example, if a customer signs a two-year contract for $24,000, the entire $24,000 is recognized as a booking upfront, even though the customer will pay in installments. This differs from revenue, which you recognize as the customer fulfills the contract and makes payments.

With modern pricing models becoming more complex, tracking bookings requires sophisticated systems. Lago can ingest up to 15,000 billing events per second. Lago's event-based architecture provides a solid foundation for building a fair pricing model that scales with your business , ensuring that complex contract commitments are accurately captured and tracked over time.

Bookings and Your Financial Reports

Bookings are a critical metric for financial reporting, especially for SaaS companies or any business with recurring revenue. While revenue shows the money currently coming in, bookings offer a clearer picture of long-term growth. Analyzing bookings helps you forecast future revenue, evaluate sales team performance, and fine-tune your pricing strategies.

By tracking bookings, you can also identify potential contract issues or roadblocks in your revenue cycle early on. This data is essential for making informed decisions about your business's future. Understanding how bookings contribute to your overall financial health is key to strategic planning and sustainable growth.

Components of Bookings

Bookings aren't just a single number; they're made up of several key components that provide a more granular view of your sales performance and customer behavior. Understanding these components helps you identify areas for growth and potential risks.

New Customers

New customer bookings are the lifeblood of any growing business. These bookings represent the value of contracts signed with first-time customers. This component is crucial for understanding the effectiveness of your marketing and sales efforts in attracting new business. A healthy flow of new customer bookings indicates a strong growth trajectory and expanding market reach.

For example, if you land three new customers each with $10,000 annual contracts, your new customer bookings for that period would be $30,000. With usage-based pricing models, these bookings may include both guaranteed subscription revenue and projected consumption-based revenue based on expected usage patterns.

Renewals

Renewals reflect the ongoing value your product or service provides to existing customers. These bookings represent the value of contracts renewed by current customers. Tracking renewal bookings helps you gauge customer satisfaction and the stickiness of your offerings. A high renewal rate signifies strong customer retention, which is essential for stable, predictable revenue streams.

For companies with usage-based pricing, renewal bookings often exceed original contract values due to organic usage growth. If five existing customers renew their $5,000 annual contracts but their usage has grown, actual renewal bookings might total $32,000 instead of $25,000, reflecting increased customer value realization.

Churn

While not a direct component added to bookings, churn plays a significant role in the overall picture. Churn represents the loss of customers and the corresponding contract value. A high churn rate can negatively impact your bookings and indicate underlying issues with customer satisfaction, product-market fit, or competitive pressures.

Monitoring churn is crucial for identifying areas for improvement and mitigating revenue loss. For instance, if two customers with $2,000 annual contracts churn, this represents a potential $4,000 loss in future bookings. Understanding your churn and its causes can help you develop strategies to improve customer retention.

Expansion Revenue

Expansion revenue comes from existing customers who increase their spending with your business. This can take the form of upsells (customers upgrading to a higher-tier plan) or cross-sells (customers purchasing additional products or services). With usage-based models, expansion often occurs organically as customers scale their operations and naturally consume more resources.

Tracking expansion revenue helps you identify opportunities to deepen customer relationships and maximize customer lifetime value. If an existing customer upgrades their contract from $5,000 to $7,500 annually, that $2,500 increase contributes to your expansion revenue bookings.

What Are Billings?

Defining Billings

Billings represent the total value of invoices issued to customers. Think of it as the amount of money a company is owed for the goods or services it has provided. Billings encompass everything invoiced, whether customers pay monthly, annually, or on some other schedule. They reflect the expected cash flow based on these invoices and include recurring subscription fees, one-time charges, and any other fees outlined in customer contracts.

Understanding your billings is crucial for managing short-term cash flow projections. For SaaS businesses with complex pricing models, this becomes even more important as billings may vary significantly based on actual usage patterns rather than fixed subscription amounts.

How Billings and Bookings Differ

While both bookings and billings are essential metrics, they represent different stages in the sales cycle. Bookings represent the total value of signed customer contracts, regardless of when the actual payment will be received. They offer a forward-looking view of future revenue potential.

Billings, on the other hand, show what has been invoiced to customers and what is expected to be collected in the near term. Bookings give you insight into sales momentum and overall deal flow, while billings provide a clearer picture of expected short-term cash flow.

The relationship becomes more complex with usage-based pricing. A customer might book $100,000 in annual API usage, but their monthly billings fluctuate based on actual consumption—$12,000 in January, $6,000 in February. Modern billing platforms handle this complexity by processing usage data in real-time and generating accurate invoices that reflect true consumption patterns.

Evolution of SaaS Pricing Models

The landscape of SaaS pricing has evolved significantly beyond traditional subscription models. Understanding how these changes affect bookings and billings calculations is crucial for modern SaaS companies.

Traditional vs. Modern Pricing Approaches

The most popular SaaS billing models include subscription-based billing, usage-based billing, and hybrid billing (a mix of the two) [1]. Most SaaS companies opt for a combination of these approaches. A hybrid (combination) pricing model drives more revenue as your customer grow, while limiting your risk, with clauses like minimum commits [2].

This evolution creates new challenges for tracking bookings and generating accurate billings, as companies must handle multiple pricing dimensions simultaneously.

Usage-Based Billing Systems

Usage-based billing, also known as metered billing or pay-as-you-go, means customers pay only for what they use [3]. This model directly aligns costs with consumption, ensuring customers pay only for their actual usage.

Also called the "pay as you go" model or consumption-based pricing, this option is directly proportional to how much a customer uses your product. The price increases when they use more and decreases when they use less. You can charge your customers on various units such as the number of emails sent, API calls, number of phone calls, number of transactions, etc [2].

However, a significant challenge with usage-based pricing is billing [2]. Companies need sophisticated systems to track usage accurately and generate precise billings in real-time.

Hybrid Pricing Models

Hybrid Pricing Models Gaining Popularity: The High Alpha 2024 SaaS Benchmarks Report found that 22% of companies are adopting hybrid pricing models, blending subscription fees with consumption-based elements to offer more predictable yet scalable costs [4].

Based on the OpenView study, 46% of companies use a hybrid approach, offering their customers usage-based plans alongside traditional subscriptions [5].

For example, New Relic's pricing page shows how the company charges on two different axes: data costs and user costs. User costs are monthly, recurring fixed costs depending on the number of users/seats purchased — a classic subscription model. Data costs then sit on top of subscription costs, where a customer's monthly cost for data depends on the amount, and also type, of data used. In New Relic's case, a company will pay $0.30/GB for normal data usage, and $0.50/GB for Data Plus usage (beyond the free 100 GB). From a vendor perspective, this generates predictable, recurring revenue (user costs) and also captures variable, consumption-driven revenue (data costs) [6].

The Need for Advanced Billing Infrastructure

As pricing models become more sophisticated, companies need billing systems that can handle the complexity. Lago supports all pricing models. Create pay-as-you-go and hybrid plans in no time with our intuitive user interface or API .

The platform addresses the core challenge of modern SaaS billing: accurately tracking usage across multiple dimensions and converting that data into precise billings and revenue recognition. This capability is essential for maintaining accurate bookings-to-billings relationships in complex pricing scenarios.

Calculating Bookings and Billings

Understanding how to calculate bookings and billings becomes more sophisticated with modern pricing models. Let's break down the calculations and explore how automated systems handle the complexity.

Calculating Bookings

Bookings represent the total value of signed customer contracts, regardless of when you receive payments. They're a forward-looking metric, offering insights into your future revenue stream.

To calculate total bookings, add up all your signed contract values. For example, if you sign three contracts worth $10,000, $15,000, and $20,000, your total bookings are $45,000.

With hybrid pricing models, bookings calculations become more complex. Consider an enterprise contract with:

• Base subscription: $50,000 annually
• Projected API usage: 2 million calls at $0.01 per call = $20,000 annually
• Total Bookings: $70,000

Modern billing platforms can help refine these projections by analyzing similar customer usage patterns, potentially adjusting projected bookings based on historical data.

Calculating Billings

Billings represent the total amount invoiced to customers during a specific period. For traditional subscriptions, this calculation is straightforward. However, with usage-based components, billings require real-time aggregation of consumption data.

For hybrid pricing models, monthly billings might include:

• Subscription fee: $4,167 (annual fee divided by 12)
• Usage charges: Variable based on actual consumption
• One-time fees: Implementation or setup charges

Modern billing systems automate this complexity by processing usage events in real-time and applying pricing rules automatically. Depending on the configuration of your plans, Lago automatically calculates what each customer owes you and generates invoices .

Calculating Billings from Revenue

While you calculate billings by summing up invoices, you can also determine them using your revenue and deferred revenue figures. The basic formula remains: Billings = Revenue + Change in Deferred Revenue.

For example, if your revenue for the quarter is $100,000, and your deferred revenue increased by $20,000, your billings would be $120,000. This indicates you invoiced $120,000 worth of services but only recognized $100,000 as earned revenue, with $20,000 representing future service delivery obligations.

Understanding this relationship is crucial for SaaS businesses with recurring revenue models, as it helps forecast future revenue and manage cash flow effectively.

Comparing Calculation Methods

Comparing bookings and billings provides a comprehensive view of your financial health. Bookings offer insights into future revenue potential and sales momentum. Billings show expected cash flow in the near term, essential for managing expenses and investments.

With usage-based models, this comparison reveals customer engagement levels. Higher billings relative to bookings might indicate customers exceeding projected usage, suggesting expansion opportunities. Lower billings might signal underutilization, requiring customer success intervention.

Converting Bookings to Revenue

Understanding how bookings convert to revenue is essential for managing subscription-based businesses, especially those with complex pricing models. This conversion process reveals the true financial performance beyond initial contract signings.

The Conversion Process

Bookings represent the total value of signed customer contracts, providing a forward-looking view of financial health and indicating potential revenue from closed deals. However, bookings don't become revenue until you've delivered the service and received payment.

For example, if a customer signs a two-year contract for $24,000, you record the entire amount as bookings at signing. But you recognize revenue gradually as you provide the service over those two years. With monthly service delivery, you'd recognize $1,000 in revenue each month.

This distinction becomes more complex with usage-based pricing, where actual revenue may vary significantly from booked projections based on real consumption patterns.

Impact on Financial Forecasting

By analyzing bookings, billings, and revenue together, businesses gain a comprehensive understanding of their financial health. Strong bookings signal a healthy sales pipeline and future growth potential. Consistent billings indicate predictable revenue streams, while actual revenue shows performance against projections.

For usage-based models, tracking the conversion from bookings to actual revenue reveals important insights:

• Customer engagement levels and product adoption
• Accuracy of usage projections in sales processes
• Opportunities for pricing optimization or customer education

A surge in bookings might indicate future revenue growth, but if actual usage-based billings lag behind projections, it could signal customer onboarding challenges or overoptimistic sales assumptions.

Revenue Recognition Automation

Modern billing platforms automate much of this complexity. Lago automatically generates invoices for each customer according to the plan model: the subscription fee can be billed at the beginning or at the end of the billing period while usage-based charges are always calculated at the end of the billing period .

This automation ensures proper revenue recognition treatment across different pricing components while reducing manual accounting work and potential errors.

Key SaaS Metrics and Their Relationship to Bookings, Billings, and Revenue

Several key SaaS metrics are closely tied to bookings, billings, and revenue. Understanding these relationships is crucial for comprehensive financial analysis, especially with modern pricing models.

Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR) represents the total revenue expected from all active subscriptions over a year. It provides a clear view of predictable revenue and is closely tied to bookings. New contracts contribute to future ARR, giving you a sense of your company's growth trajectory.

For example, if you close a $12,000 annual deal in June, your ARR increases by that full amount, even though the revenue will be recognized over the next twelve months. With usage-based components, ARR calculations become more nuanced, often including projected recurring usage based on historical patterns.

Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) reflects the total recurring revenue generated from subscriptions in a given month. MRR is essential for understanding short-term cash flow and is influenced by both bookings and billings.

New bookings increase projected MRR, while billings reflect the actual invoicing of that recurring revenue. For hybrid pricing models, companies often track both "Subscription MRR" and "Usage MRR" to understand different revenue components and their predictability.

Total Contract Value (TCV)

Total Contract Value (TCV) represents the total amount a customer commits to pay over the entire contract period, including recurring charges, one-time fees, and projected usage-based charges. TCV is critical for understanding the overall value of customer relationships and is directly related to bookings.

A higher TCV suggests stronger customer commitment and greater potential for long-term revenue, though actual realization depends on usage patterns and contract fulfillment.

Annual Contract Value (ACV)

Annual Contract Value (ACV) represents the average annual value of a customer contract, calculated by dividing the TCV by the contract length. ACV helps businesses assess contract value and is a key component of bookings calculations.

For usage-based models, ACV calculations often include both guaranteed minimums and projected usage-based revenue, providing a standardized way to compare contracts of different structures and complexities.

Deferred Revenue

Deferred revenue represents the portion of your billings that you haven't yet earned—money you've invoiced but haven't delivered the corresponding service for. This metric is crucial for understanding cash flow and revenue recognition over time.

For example, if a customer pays for a year's subscription upfront, you'll recognize that revenue monthly as you deliver the service. With usage-based billing, deferred revenue handling becomes more complex, as usage charges are typically recognized immediately upon service delivery.

Churn and Expansion Revenue

Churn refers to the rate at which customers cancel their subscriptions, significantly impacting future bookings and revenue projections. Monitoring churn is essential for sustainable growth and accurate financial forecasting.

Expansion revenue—additional revenue from existing customers through upsells, cross-sells, or increased usage—is vital for understanding growth potential within your current customer base. With usage-based models, expansion often occurs organically as customers scale their operations, making it a key driver of revenue growth beyond initial bookings.

Understanding the Book-to-Bill Ratio

The book-to-bill ratio offers valuable insights for SaaS companies, particularly regarding sales performance and demand patterns. This metric becomes more nuanced with complex pricing models.

Definition and Calculation

The book-to-bill ratio compares the value of new orders received (bookings) to the value of products or services shipped and billed (billings) within a specific period. Calculate the ratio by dividing total bookings by total billings.

For example, $1.5 million in bookings divided by $1 million in billings yields a book-to-bill ratio of 1.5. This suggests strong demand, with incoming orders exceeding current deliveries.

Interpreting the Ratio

A ratio greater than 1 generally indicates robust demand, with more orders coming in than going out, pointing to potential revenue growth. A ratio of 1 signifies healthy balance, where incoming orders match fulfilled deliveries. A ratio below 1 might suggest softening demand or could simply mean the company is working through existing contract backlogs.

With usage-based pricing, this ratio interpretation becomes more complex, as billings fluctuate with actual consumption rather than contract timing.

Impact of Pricing Models on the Ratio

Modern pricing models affect book-to-bill ratio interpretation:

• Subscription models: More predictable ratios based on contract timing
• Usage-based models: Higher volatility due to consumption fluctuations
• Hybrid models: Ratios reflect both contract signings and usage patterns

Understanding these nuances helps companies better interpret their book-to-bill ratios and make informed strategic decisions.

Managing Complex Billing Scenarios

Modern SaaS companies face increasing complexity in managing bookings and billings across multiple pricing models. Success requires sophisticated approaches and automated systems.

Multi-Year Contracts with Usage Components

Multi-year contracts add complexity when combined with usage-based pricing. Bookings represent the total contract commitment, but actual billings vary based on consumption patterns over the contract term.

For example, a three-year contract worth $300,000 might include:

• $150,000 in guaranteed subscription fees ($50,000 annually)
• $150,000 in projected usage-based charges (varying monthly)

While you record $300,000 in bookings upfront, actual billings depend on real usage patterns. Modern billing systems track these relationships automatically, ensuring accurate invoicing and revenue recognition throughout the contract term.

Billing Accuracy and Error Prevention

Software companies with complex pricing typically lose 1-3% of revenue to under-billing, and sometimes much more. Preventing revenue leakage requires automated systems that can handle billing complexity without manual errors.

Key error prevention mechanisms include:

• Real-time usage tracking to prevent missed billing events
• Automated pricing rule application to eliminate calculation errors
• Comprehensive audit trails for billing transparency
• Automated reconciliation between usage data and billing records

Customer Transparency and Communication

Complex pricing models require clear customer communication to prevent disputes and maintain satisfaction. Successful companies provide:

• Real-time usage dashboards showing current consumption
• Predictive billing estimates based on usage trends
• Detailed invoice breakdowns explaining all charges
• Self-service tools for plan management and optimization

This transparency reduces billing disputes and enables customers to manage their costs proactively, leading to higher satisfaction and reduced churn.

Integration with Business Systems

Modern billing operations require seamless integration across business systems:

• CRM integration for automated account updates and usage alerts
• ERP connectivity for streamlined revenue recognition and financial reporting
• Payment processing supporting multiple methods and currencies
• Analytics platforms for comprehensive business intelligence

We're open-source, so it's not 'buy Lago or build it yourself', there's a third option: you can build on top of Lago. Audit our code and keep your data within your infrastructure, if you want full control . This flexibility ensures billing systems can adapt to unique business requirements while maintaining operational efficiency.

Common Bookings and Billings Misconceptions

It's easy to get confused about the differences between bookings, billings, and revenue, especially with modern pricing models. Let's clear up some common misconceptions.

Separating Bookings and Billings

One of the biggest mix-ups is thinking bookings and billings are the same. Bookings represent the total value of signed contracts—think of it as a handshake deal showing potential future revenue. Billings represent the amount you actually invoice customers during a specific period.

For example, you might book a year-long software subscription worth $120,000, but bill your customer monthly at $10,000 per invoice. With usage-based components, this distinction becomes even more important, as actual billings may vary significantly from booked projections based on real consumption patterns.

Understanding Revenue Recognition

Another common misunderstanding revolves around revenue recognition. Revenue isn't just the money you receive; it's the money you've earned after providing a product or service. For subscriptions, revenue is recognized over the contract's lifetime, not when the initial payment hits your bank account.

Think of it this way: if a customer pre-pays for a year of software, you don't claim all that revenue upfront. Instead, you recognize it each month as you deliver the service. With usage-based pricing, revenue recognition often occurs immediately upon service delivery, making the process more complex but potentially faster.

Importance of GAAP Compliance

Understanding the difference between bookings, billings, and revenue is crucial for accurate financial reporting, and that's where GAAP (Generally Accepted Accounting Principles) comes in. GAAP provides a standardized framework for recognizing revenue, ensuring consistency and transparency in financial statements.

This is particularly important for subscription businesses with complex pricing models, where revenue recognition rules must be applied correctly across different pricing components. Following GAAP ensures your financial reporting reflects the true economic reality of your business, building trust with investors and stakeholders.

Modern billing platforms automate much of this complexity, ensuring GAAP-compliant revenue recognition across subscription and usage-based components while reducing manual accounting work.

Understanding Cash Flow vs. Revenue

Billings give you insight into your expected cash flow, including recurring subscription fees, usage-based charges, and one-time fees. High bookings usually lead to higher billings and, eventually, higher revenue, but the timing relationships vary significantly with different pricing models.

For example, a customer might sign a contract (booking) and receive invoices (billings) but then reduce usage (affecting future billings) or churn before fulfilling the entire contract term. This variability highlights why it's crucial to track each metric separately and understand their relationships.

Best Practices for Modern SaaS Financial Management

Successfully managing bookings and billings in today's complex SaaS environment requires following proven best practices and leveraging appropriate technology solutions.

Implementing Robust Tracking Systems

Invest in billing systems designed for the complexities of modern SaaS financials, including deferred revenue, usage-based billing, and hybrid pricing models. Our billing product includes a first-class API for engineers and a pixel-perfect user interface for business teams. Every billing piece we build, you won't have to build yourself .

Look for systems that provide:

• Real-time usage tracking and aggregation
• Automated invoice generation across pricing models
• Comprehensive revenue recognition capabilities
• Seamless integration with existing business systems

Defining Clear Metrics and Processes

Start by clearly defining what bookings, billings, and revenue mean for your specific business model. Document how different pricing components are handled and ensure consistent application across your organization.

Establish regular processes for:

• Monthly bookings and billings reconciliation
• Revenue recognition review and adjustment
• Usage data validation and accuracy checks
• Customer billing dispute resolution

Automated vs. Manual Approaches

While manual tracking might work for simple subscription models, complex pricing requires automation. Manual processes become error-prone and time-consuming as businesses scale, particularly with usage-based components that require real-time calculations.

Automated tracking provides:

• Reduced manual effort and error rates
• Real-time financial visibility and reporting
• Scalable operations that grow with your business
• Improved accuracy in complex pricing scenarios

Customer Communication and Transparency

Maintain clear communication with customers about pricing and billing, especially with usage-based models where costs can fluctuate. Provide tools and dashboards that help customers understand and predict their usage and costs.

Effective communication includes:

• Clear pricing documentation and examples
• Real-time usage dashboards and alerts
• Proactive communication about billing changes
• Self-service tools for plan management

The Future of SaaS Billing

The billing landscape continues to evolve with new pricing models and customer expectations. Understanding these trends helps companies prepare for future challenges and opportunities.

Emerging Pricing Trends

As more SaaS companies integrate AI into their offerings, they are rethinking their monetization strategies [4]. By enabling businesses to "do more with less," AI challenges the relevance of seat-based pricing models while driving innovation in outcome-based, consumption-based and hybrid strategies [8].

Companies are increasingly adopting sophisticated pricing approaches that align costs with customer value realization, requiring more flexible billing infrastructure to support these models.

Technology Advancement Requirements

Future billing systems must support:

• Real-time processing of high-volume usage data
• AI-powered pricing optimization and recommendations
• Flexible integration with diverse business systems
• Advanced analytics for pricing and usage insights

Preparing for Complexity

As pricing models become more sophisticated, companies need billing platforms that can adapt and scale. The usage-based billing and metering solution you won't outgrow. Put advanced billing on autopilot to focus on what matters: Revenue .

Investment in flexible, scalable billing infrastructure positions companies to take advantage of new pricing opportunities while maintaining operational efficiency and financial accuracy.

Frequently Asked Questions

Why is understanding the difference between bookings and billings important for my business?

Understanding the difference gives you a complete picture of your financial health. Bookings provide insight into future revenue from signed contracts, helping you forecast and plan for growth. Billings show what you've invoiced and expect to collect in the short term, crucial for cash flow management. Together, they offer a more comprehensive view than revenue alone, especially with complex pricing models.

How do modern SaaS pricing models affect bookings and billings tracking?

According to a 2024 industry report, 61% of SaaS companies have shifted away from flat-rate pricing to more dynamic billing models , making tracking more complex. Usage-based billing, hybrid models, and consumption-based pricing require real-time metering and sophisticated billing automation to accurately capture bookings and generate billings based on actual usage patterns rather than fixed amounts.

What's the difference between bookings, billings, and revenue?

Bookings represent the total value of signed contracts, indicating future revenue potential. Billings represent the total value of invoices issued, showing what you expect to collect in the near term. Revenue is the actual money earned and recognized after delivering goods or services. They are interconnected but distinct, each offering a unique perspective on your financial performance.

What are common mistakes businesses make when managing bookings and billings?

Common mistakes include treating bookings and billings as interchangeable when they represent different stages in the revenue cycle, misunderstanding revenue recognition (revenue is earned when services are delivered, not when cash is received), and assuming bookings guarantee revenue without accounting for potential churn or contract changes.

How can billing automation help with complex pricing models?

Modern billing platforms process usage data in real-time, apply complex pricing rules automatically, and generate accurate invoices without manual intervention. Lago supports all pricing models. Create pay-as-you-go and hybrid plans in no time with our intuitive user interface or API . This automation reduces errors, improves accuracy, and enables businesses to support multiple pricing models simultaneously while maintaining operational efficiency.

Citations

• [1] https://tridenstechnology.com/billing-models/
• [2] https://www.getcacheflow.com/post/top-5-saas-pricing-models
• [3] https://www.hubifi.com/blog/usage-based-billing-saas-guide
• [4] https://zylo.com/blog/consumption-based-pricing-saas/
• [5] https://www.eleken.co/blog-posts/subscription-vs-usage-based-pricing-choosing-the-perfect-pricing-model-for-saas-success
• [6] https://medium.com/bcgontech/the-evolution-of-pricing-models-for-saas-companies-6d017101d733
• [8] https://www.lek.com/insights/tmt/us/ei/future-role-generative-ai-saas-pricing

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