True Tales from the MSP Trenches: Rule Based Billing
“Every month when we do billing, we have to manually review all our RMM invoices to make sure we are billing the correct station counts each month.”
If you can relate to the above statement, keep reading because you’ll learn about:
How rule-based billing works
All the benefits (& drawbacks)
Prerequisites to rule-based billing
Billing Products 101
What to do when you get stuck
Welcome, Autotask warriors and Service Delivery Gladiators. Does the above sound familiar? It sure does for many MSPs. While many have embraced per-seat billing in Autotask, many still bill per-device and some have moved back.
Today, we’re going to hear from a former MSP owner named Chris about his journey with Autotask and rules-based billing. No matter which way you bill, I think you’ll find this interesting, so stick around.
Stephen: I’m glad you’re here.
Chris: Thanks Stephen. What I said above was absolutely me. I had to do this every month when it came time to bill our managed services. Certainly, server counts did not move that much, but workstations? That was an entirely different problem.
After getting my Autotask Certification, I learned about something they call “Rule Based Billing.” It is sometimes also called Consumption or Dynamic billing.
Essentially rule based billing works like this:
RMM sends Assets (or configuration items) to Autotask; Autotask syncs these with clients in its database.
User counts arrive in Autotask either organically as part of the service desk or sync with O365/AD/Azure.
When assets or users are added or removed from the sync sources, Autotask also removes these assets or users.
Then on a specific day of the month, Autotask will “count” the assets or users associated with the billing product and create charges in approve and post.
Easy right? Well, kind of.
In the simplest form, Rule Based Billing works like the above and provides you some awesome benefits, like:
Reduces time preparing managed services invoices
Provides accurate accounting of assets in the RMM inside of Autotask
Automates parts of the billing process
But it has a few drawbacks: namely, if your team is not good about removing stations retired from the RMM console, it will impact the rule-based billing.
Pre-Requisites to Rule-Based Billing
In order to utilize Rule Based Billing, you would expect it to follow some... you guessed it... RULES.
Rule Based Billing only works from the Autotask product list. At this time, it will not work with services. Also, Autotask does not recommend adding more than one billing product to an asset.
Lastly, bundles will not be able to use billing rules. Bundles are created from services, not products.
Use Case
If you are looking into using billing rules, here are some questions to ask yourself:
Is this a product or service? (Hint: your managed services offerings are products. The things that make up the offering, those can technically be classified as services).
Is this product billed per device or per contact (user)?
Does the count of this billing product vary month to month?
If any of the above are true, then you might have a good use case for billing rules.
Billing Products 101
Billing products are created in the Autotask products module and are defined by the billing method configured during set up. There are two choices – per user or per asset.
Per User – This is as it sounds: the system will look at the contact list of the client and see if any contacts are associated with a billing product, count those users, and then create charges.
Per Asset – This is the more common method - and on some levels - easier to manage and maintain. The counts come from the RMM, and the assets are placed in Autotask under the client account. The billing rules will perform the count of associated billing products and create charges.
Most MSP’s have their own brand of Managed Service Product that they sell. For example, “Managed Desktop – Gold Plan” and inside of that plan, they offer a set of services like RMM, Anti-Virus, EDR, 24/7 Monitoring, etc.
This would be a billing product. You would create this managed service plan (or product) and in the description write out what is being provided for the price. Then set up the billing rules and associate the devices or users.
Three Things to Know about Billing Rules:
They are set at the contract level, and they also allow you to override pricing of the billing product.
You can set the billing rules to prorate charges.
You can have them itemize the assets or users being billed for that product. This gives the customer an opportunity to audit their seat and asset counts for each billing product.
Summary:
In short, Billing Rules are a very effective way to automate your managed services billing if you are invoicing per asset or per user.
The rules are configured on the contract level and can be set to override pricing, itemize assets or users under that rule, and prorate charges.
They require you to set up a billing product (or products) and associate those products to assets or users.
You predetermine the date that the billing rule will execute its “count” and create charges.
They can be used to automate any invoicing of dynamically changing items that you bill for monthly.
They are not good for single site charges – for example if you bill per site for router maintenance, this would not be a good candidate for a billing rule. Items that change often are good candidates for billing rules
Stephen: What did you think? Wish you could implement Rule-Based Billing? Having issues?
If so, I have good news: Advanced Global has experience setting up billing rules for our clients inside of our Advanced Contracts program. Under this program, you will be walked through the setup, trained on how to utilize and create your own billing rules to automate the otherwise time-consuming managed services billing.
How’s that? You want more? Well, then I have better news: the same Chris who shared his story is now an Advanced Global Coach. Sign up for Advanced Contracts or post your questions in the Service Delivery Gladiator’s Community and you’ll have direct access to Chris and his expertise.
Questions? Comments? Want to be interviewed in a future “Tales from the MSP Trenches” column? Email us to let us know at info@agmspcoaching.com.
Elevate with boldness. Excel in service innovation. Drive to Thrive.
Steve & Co