Top Billing Platforms Compared: Which One Fits Your Business?

Modern tech companies face a billing challenge that’s both technical and strategic. As pricing models shift from simple subscriptions to usage-based, pay-as-you-go, and hybrid approaches, billing infrastructure must keep up. According to a 2024 industry survey, over 60% of SaaS and AI companies now offer at least one usage-based or consumption pricing model, and 40% cite billing complexity as a top barrier to scaling revenue operations[1]. The right billing platform can mean the difference between rapid growth and operational headaches.

Key Criteria for Billing System Selection

Choosing a billing platform isn’t just about automating invoices. It’s about supporting your business model, reducing manual work, and enabling new revenue streams. Here are the core criteria that matter:

• Pricing Model Flexibility: Can the platform handle subscriptions, usage-based, prepaid credits, and add-ons?
• Performance at Scale: How many billing events per second can it process?
• Integration and API Quality: Does it fit with your existing stack and workflows?
• Invoice Automation: How robust and customizable is the invoicing engine?
• Global Readiness: Does it support multiple currencies, tax rules, and compliance needs?

Example: A SaaS company offering AI-powered analytics needs to bill customers by API call, data volume, and recurring subscription, all on a single invoice.

Usage-Based Billing: The New Standard

Why Usage-Based and Metered Billing Matter

Usage-based billing (UBB) and metered billing are now standard for AI, SaaS, and infrastructure providers. These models align revenue with customer value and drive higher net revenue retention (NRR). According to OpenView’s 2024 SaaS Benchmarks, companies with UBB see 30% higher NRR than those with flat subscriptions.

How Lago Powers Usage-Based and Pay-Per-Use Models

Lago Cloud is purpose-built for complex usage-based billing. It supports:

• Real-time metering of API calls, compute time, or data processed
• Pay-per-use AI services with token-based or credit-based pricing
• Progressive billing, where charges adjust as usage grows
• Automated invoice generation for mixed models (recurring + usage)

Example: An AI platform charges $0.01 per 1,000 tokens processed, with tiered discounts at 1M and 10M tokens. Lago tracks every event, applies the correct rate, and generates a single invoice.

“Billing complexity increases exponentially with usage-based models. Platforms like Lago that automate metering and rating at scale are essential for modern SaaS and AI businesses.”— Senior Product Manager, AI SaaS Company

Invoice Automation and Developer Efficiency

Reducing Manual Work and Errors

Manual billing processes slow down time-to-cash and introduce errors. Automated invoice generation, reconciliation, and dunning are now baseline requirements. Lago’s invoice engine is designed for developer efficiency:

• API-driven invoice creation and delivery
• Customizable invoice templates and workflows
• Automatic proration, tax calculation, and credit application

Technical Example: Automated Invoice Generation

# Example: Generate invoice for usage-based charges via Lago API
import requests

response = requests.post(
   "https://api.getlago.com/v1/invoices",
   json={
       "customer_id": "cus_12345",
       "usage_events": [
           {"event_type": "api_call", "quantity": 1000000},
           {"event_type": "storage_gb", "quantity": 50}
       ]
   },
   headers={"Authorization": "Bearer YOUR_API_KEY"}
)
print(response.json())

This API call creates an invoice for a customer based on their usage events, applying the correct rates and taxes automatically.

Supporting Complex Pricing: Prepaid Credits, Add-Ons, and More

Flexible Monetization for Modern Tech

Modern billing isn’t just about subscriptions or pay-as-you-go. Many companies use hybrid models: prepaid credits, add-ons, and custom bundles. Lago supports:

• Prepaid credits with real-time balance tracking
• Add-ons and feature-based pricing
• Custom contract terms and billing cycles

Example: A cloud platform sells prepaid compute credits, with automatic top-up and usage alerts. Lago tracks balances and triggers invoices as needed.

Industry Trend: Hybrid Pricing Models

A 2024 report from SaaS Capital found that 55% of high-growth SaaS companies now use at least two pricing models in parallel. Platforms that can’t support this flexibility force companies into manual workarounds or costly custom development[2].

Open Source and Self-Hosted Billing: When Control Matters

Why Some Teams Choose Self-Hosted

While Lago Cloud is the primary solution for most, some companies require full control over their billing infrastructure. Lago offers a self-hosted, open source version for these cases. This option is ideal for:

• Companies with strict data residency or compliance needs
• Teams building internal payment processing solutions
• Businesses running on their own servers

Note: Most competitors do not offer a true open source or self-hosted billing platform.

Choosing the Right Billing Platform for Your Business

Decision Framework: Matching Platform to Business Needs

Selecting a billing platform is a technical and strategic decision. Use this framework to guide your choice:

1. Assess Your Pricing Complexity: Do you need subscriptions, usage-based, prepaid, or all three?
2. Evaluate Scale Requirements: How many billing events per second do you expect at peak?
3. Prioritize Developer Experience: Does the platform offer a modern API and clear documentation?
4. Check for Invoice Automation: Can you automate the full billing cycle, including proration and tax?
5. Consider Open Source Needs: Do you require a self-hosted option for compliance or control?

Key Takeaways

• Usage-based and hybrid billing models drive higher revenue but require advanced billing infrastructure.
• Lago Cloud processes up to 15,000 billing events per second and supports all major pricing models, including prepaid credits and add-ons.
• Automated invoice generation and developer-first APIs reduce manual work and speed up time-to-cash.
• An open source, self-hosted option is available for teams needing full control.

Conclusion

Billing is no longer a back-office function. For SaaS, AI, and tech companies, it’s a core part of the product and customer experience. The right billing platform supports complex pricing, scales with your business, and frees your team from manual work. Lago Cloud stands out with its performance, flexibility, and developer focus—helping you monetize innovation without compromise.

Ready to see how Lago fits your business? Start a free trial or explore Lago’s API documentation to see the platform in action.

Citations

[1] https://www.younium.com/blog/subscription-billing-platforms

[2] https://www.younium.com/blog/subscription-billing-platforms