Why Usage-Based Pricing Breaks Finance — and How Teams Can Get Ahead

On paper, usage-based pricing looks like the perfect growth lever: customers pay for what they use, sales has more flexibility, and product teams get to experiment.

But inside the back office? It can be another story.

Billing teams can be buried under inconsistent data. Revenue teams wrestle with ASC 606 every time consumption spikes. Controllers watch close cycles drag on while reconciliations pile up. The promise of usage often translates into operational strain.

Here are three of the biggest challenges we see, along with some first steps teams can take to get ahead.

Challenge 1: Data That Doesn’t Line Up

Usage events start in the product, but by the time they make it into billing or revenue systems, the numbers rarely match. Every discrepancy leads to disputes, revenue leakage, and hours of manual clean-up.

First steps:

• Deploy real-time usage metering to transform raw consumption into accurate, billable metrics.
• Adopt a unified usage data model so finance, engineering, and billing ops are all working from the same source of truth.

Challenge 2: Billing and Revenue Recognition Under Pressure

Variable consumption doesn’t fit neatly into billing cycles or rev rec rules. Finance ends up hacking together manual processes that don’t scale.

First steps:

• Involve finance early in pricing design to ensure new models can be supported operationally.
• Automate revenue recognition workflows so dynamic pricing stays compliant without manual intervention.

Challenge 3: Forecasting Without Confidence

Usage is unpredictable by nature. But when data is siloed or delayed, forecasting becomes guesswork. Leadership loses trust in the numbers, and finance gets stuck explaining variance instead of guiding strategy.

First steps:

• Unify order-to-cash systems — from CPQ to billing to revenue — to ensure consistent, end-to-end usage data.
• Automate revenue subledger postings so usage events link directly to performance obligations, improving compliance and forecast accuracy.

Ready to Get Started?

These steps are only the beginning. For a deeper dive with practical strategies from the experts, check out our live usage demo on November 5.