Usage-Based Billing, Invoicing and Revenue

Last updated: April 20, 2026

Usage-based (also called consumption-based or pay-as-you-go) billing and revenue is determined by actual product or service consumption rather than fixed periodic fees.

Common examples include (but not limited to):

  • Cloud infrastructure providers charging per compute hour

  • Communication platforms billing per SMS or API call

  • Data analytics tools pricing by gigabytes processed

  • AI services charging per token or inference

  • Payment processors taking a percentage per transaction

Overview

In Campfire, usage-based billing follows the following workflow:

  1. Set-up - Configure products, pricing models, and contract terms that define how usage will be measured and billed

    1. Tracking of prepaid credit usages and balances

  2. Recording of Usage Data - Capture and meter actual customer consumption as it occurs

  3. Invoicing - Generate customer bills based on metered usage and applicable pricing rules

  4. Revenue Recognition - Post accounting entries through the monthly checklist

Setup

1a. Product A is set up in Campfire with a Usage Tier (See our article on product setup).

This product setup lets Campfire know what usage metrics to track and how to calculate charges based on consumption.

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While creating the product, update Usage Tiers. Here, you can Add or Edit existing usage Tiers. Usage Tier types include Unit Based, Volume Based, Percentage Based, and Graduated Tiered usage.

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Enter your Usage Tier for the selected Product and Click Update Usage Tier.

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1b. A Contract is set up for a Customer (See our article here on contract setup). Within the contract setup, you can configure two usage-based key settings:

  • Terms (Min Amount) - Inputting a 'Minimum Monthly Commitment Amount' and 'Minimum Monthly Commitment Quantity' establish the guaranteed minimums for the contract.

Campfire uses these values to ensure the customer is billed for at least the committed amount each period, regardless of actual usage, and to trigger the appropriate revenue recognition treatment

  • Revenue (Usage Tiers) - In addition to being created at the Product level, Usage Tiers can also be created at the Contract level. Updating tiers within the contract will drive how revenue will be recognized.

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Record Usage Data

Once Product and Contract setup is complete, record usage data for a customer one of two ways, Manually or via CSV Upload:

  1. Manually - Navigate to the Customer's Contract (Revenue > Contracts) to add usage data.

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  1. Create Usage Data

  • Click the Create Usage Data button.

  • Enter the usage lines for the billing period (February 2026 in this example)

  • Click the Apply Usage Tiers - to apply and preview the tier pricing structure you previously configured to the usage data you just entered.

  • Review the calculated amounts, then click 'Create Usage Data' to save

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  1. Via CSV Upload. You can bulk upload usage data through CSV. Go to Revenue > Contracts > Actions > Upload Usage Data. Using the 'Download Template', update the following required fields:

  • Contract Name

  • Product Name

  • Product ID

  • Product Identifer

  • Usage Group

  • Description

  • Start Date

  • End Date

  • Quantity

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The uploaded usage-based data will now appear in the 'Usage' section of the contract.

Invoicing:

  1. Navigate to the Invoices tab of the Contract. Here, you can select which Usage Lines to include in the invoice.

  2. Click Create Invoice to generate the invoice, making any necessary edits before finalizing.

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Revenue Recognition

Navigate to the Revenue section of the Contract. Multiple revenue lines now appear for this period. These lines will automatically create the necessary revenue recognition entries when you execute the month-end close checklist.

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