> ## Documentation Index
> Fetch the complete documentation index at: https://docs.slm.m1amdocs.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Usage Based Billing

Vindicia Subscribe gives you the option to offer usage-based "**Pay as you Go"** models, or prepaid license models, by using Rate Plans and associating them with your products. With usage-based products, pricing varies by the number of items or the quantity of service used. In contrast, a flat pricing system is a set price for the product or service unaffected by the number of items used. Usage-based pricing provides you the opportunity to start customers with an inexpensive plan and upsell them as they realize the value of your offering. For more details, see [Rate Plans](ratePlans).

Subscribe offers two types of rate plans, each of which can be configured to suit your needs:

* **Prepaid, license-based models.** These plans provide your customers with the option to buy individual licenses, or seats, for prices defined in your rate plan. With this type of plan, you can establish pricing tiers based on the number of licenses purchased, making it easy to offer volume discounts.
* **Postpaid, usage-based models.** With this type of plan, your customer signs up for your service, uses it, and is charged for the services used. You can create price tiers based on the amount of service used. The measurement type used can be based on definitions you select, such as minutes, storage or processing volume, number of items used, or other measurements.

Subscribe grants entitlement to access your products if customers are in good standing with payments. For postpaid pricing, this means that the customer has successfully paid for the prior billing cycle. The number of use-events is reported throughout each billing cycle. The account is then billed according to the number of items consumed during the previous billing cycle multiplied by the tier rate, and granted entitlements for the following cycle.

**Important:** Merchants must record the events that are counted, in-order for the system to calculate the correct rate.

**Parent topic:**[Subscribe Charging and Billing](../topics/chargingBilling)


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