#david-m_best-practices

1 messages · Page 1 of 1 (latest)

terse lynxBOT
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proud oar
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Hi there. Do you have specific questions on how to achieve the above?

quasi magnet
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Yes. What would be the best way to set up pricing and subscription objects in order to be able to achieve that work flow on Stripe with minimal calculations for proration on our part with mid-term limit upgrades?

Below is an example workflow
User-signs up for Yearly Plan on Jan 1. With Free 5Gb Limit.

January: Total usage reaches 6GB → Charge for 1GB of overages (6GB - 5GB yearly limit).
February: Total usage remains 6GB → No additional charge (still within the yearly limit plus the previously charged overage).
March: Total usage increases to 8GB → Charge for an additional 2GB of overages (8GB - 5GB yearly limit - 1GB already charged).
April: Total Usage Increases to 9GB. User decides to upgrade to 10GB yearly limit -> User pays prorated price for 10GB limit, taking into account the current used amount. Essentially they pay for 1 extra GB of usage. No overages.
May: Total usage increases to 10GB → No additional charge (still within the yearly limit).
June: Total usage remains 10GB → No additional charge.
July: Total usage increases 12Gb -> Charge for an additional 2GB of overages (12GB - 10GB yearly limit).
August: Total usage increases 13Gb -> Charge for an additional 1GB of overages (12GB - 10GB yearly limit - 1GB already charged).
...(no usage for rest of year)
January (next year): Usage resets. User auto-renews yearly commit with 10GB limit.

proud oar
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Got it. Have you tried something already, or are you still in planning stages and need to know how this can be done?

quasi magnet
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I have spec-ed out a couple approaches but they all require me to keep track of already paid for overages or calculate the prorated price manually and was wondering what the recommended approach would be? Or if there's a way Stripe can handle all the calculations.
The tricky aspect is charging for monthly overages while having yearly limits, making sure not double charge overages. And also being able to upgrade those yearly limits mid-term and have customers pay a fair price.

proud oar
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The tricky aspect is charging for monthly overages while having yearly limits, making sure not double charge overages. And also being able to upgrade those yearly limits mid-term and have customers pay a fair price.
yeah exactly. this is a pretty niche use-case, so it's kinda tricky

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I can't think of a way to avoid the manual proration calculation

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So customer would pay for credits (ie GBs) ahead of time via one off invoices

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And then they'd just be billed for overage

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Prorations will still need to be calculated manually for any upgrades though since those will be handled via one-off invoices to grant more billing credits

quasi magnet
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Ah I see, I will look into using Billing Credits, so far I have not played around with those. Thank you so much!

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Since this is a pretty niche use-case, is there a more appropriate, industry standard way of having customers be on a reoccurring yearly usage commit but still have opportunity for mid-term upgrades or true-ups?
Are monthly overages not common? Yearly Overages? Maybe expansion-packs? Monthly Limits with yearly upfront charge? How would you say most usage based pricing plans are modeled?

proud oar
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What you want to achieve is doable via Billing Credits though