Skip to main content
Documentation
Documentation
Administrator Guide
Last Updated: 2023-06-23
Concept: Usage-Based Contract Pricing

Concept: Usage-Based Contract Pricing

Workday enables you to charge a customer based on how much they use your product or service. You can create a usage-based customer contract and manage your pricing with a usage rate sheet.

Minimum Commitments

Workday provides flexibility with rate sheets on your usage-based customer contracts to manage minimum commitments for your product or service.
Example: A customer contract requires a monthly minimum for support calls of $10,000. You can bill the minimum amount for the month, if the monthly usage doesn't meet or exceed it, or the actual usage, if greater.

Tiered and Volume Pricing

Tiered pricing assigns a price per unit based on quantity ranges. You can charge your customers different pricing based on purchase quantities.
Volume pricing assigns a price for all units based on the total amount within a price range.
Examples: Your customer purchases 150 units of your product. Your pricing per unit is:
  • 1-100: $10
  • 101+: $8
Tiered Pricing
Volume Pricing
You charge your customer $10 for the first 100 units and $8 for the remaining 50 units, for a total cost of $1,400.
You charge your customer $8 for all 150 units, for a total cost of $1,200.
(100 x $10) + (50 x $8) = $1,400
150 x $8 = $1,200

Tiered and Volume Pricing for Negative Usage-Based Transactions

You can load negative transactions using tiered and volume pricing reset by period or transaction.
For tiered and volume pricing reset by period, first record a usage-based transaction for the customer contract using a positive quantity. Then, record a second usage-based transaction for the customer contract using a negative quantity. Loading transactions in this order ensures that Workday prices negative transactions through the tiers correctly. When you load usage-based transactions with a negative quantity first, Workday prices them at zero.
For tiered and volume pricing reset by transaction, either:
  • Record a usage-based transaction with a positive quantity, followed by a second transaction with a negative quantity ensuring that Workday prices negative transactions through the tiers correctly.
  • Select the
    Price Negative Units in First Tier
     check box to ensure that Workday prices negative transactions at the lowest quantity tier rate.
    Example: The billing rate sheet associated with your usage-based customer contract line resets by transaction and defines tiers for:
    • 1-100 units at a rate of $100 per unit.
    • 101+ units at a rate of $90 per unit.
    When you record a usage-based transaction with a negative quantity, the billing rate sheet uses the $100 per unit price.