Rating Engine

What Is a Rating Engine?

The billing industry relies heavily on the rating engine for all billing computations. It acts as the central processing unit of the billing engine , the component that determines what a customer owes based on their actual service usage.

The job of a rating engine isn't basic arithmetic. It goes far beyond multiplying a price by a quantity. For example, a customer on a mobile plan is charged per-minute once the free calls for the first 500 minutes are used. The engine needs to know which tier applies, what discounts exist, what time of day it is, and more.

EarnBill's rating engine uses pricing models and usage-based charging to determine appropriate charges based on customer data (subscription plans), usage details (minutes talked, data consumed), time-based rates (peak and off-peak hours), and route-based rates (rate cards). It also applies applicable discounts, taxes, late fees, penalties, and prior credits. So the final invoice is accurate and reflects every detail of that customer's service usage.

EarnBill's plugin-based rating engine is powerful yet flexible enough to serve diverse use cases across different business sectors. It helps businesses try different ratings through simple configuration changes for new ideas or approaches in billing computations and decide on the right strategy that keeps customers engaged in a competitive market.

Inside the EarnBill Rating Engine

The EarnBill rating engine performs complex logic on actual consumption (usage) data using algorithms. Pricing models, to arrive at charges. EarnBill's customizable framework supports its rating engine to serve the most complex billing use cases and scenarios for all sizes of businesses.

A good example is utility sector companies. Electricity and water providers, and how they handlerating and charging. They combine a basic fee (monthly subscription) with a tiered pricing strategy based on actual consumption. Smart meters with IoT-embedded devices are installed at the customer end to track usage and transmit data to a server for billing purposes.

For instance, a water utility company uses tiered pricing per usage per month for domestic consumers:

For a customer consuming 180 liters of water in a billing cycle:

Rating Engine Across Industries

Different industries have different billing complexity. The EarnBill rating engine is designed to adapt to all of them through its plugin-based architecture, without requiring changes to the core system.

SaaS companies use various rating models depending on their use cases and business objectives. The most preferred billing model is subscription-based, along with rating strategies like freemium, tiered, per-user, usage-based, and flat rate.

Flat-rate charging is simple, everyone pays the same price regardless of features and consumption. Per-user charging means the system charges a flat rate per user for accessing the software, which works well for team-based applications where the cost is driven by the number of users.

Furthermore, SaaS businesses are dealing with feature-packed higher plans and usage-based charging approaches, which require more complex calculations using a tiered pricing strategy. Consider a company offering various subscription plans based on features, coupled with storage space on the cloud. Charges are calculated based on the amount of storage space utilized. EarnBill's rating engine empowers companies to scale rating and charging capabilities for future requirements with its flexible, out-of-the-box features.

Burstable bandwidth billing is a cost-effective way to support increased traffic load by scaling bandwidth automatically as needed. The rating engine uses a complex charging method to calculate charges based on 95% usage. A customer gets a short period of high bandwidth to support traffic load or fluctuations, provided the burst does not continue for a long duration (as per the allowed quota in hours for a given monthly billing cycle).

To charge burstable use cases, EarnBill keeps track of the bandwidth utilization and the burst period, then ignores the top 5% of utilization peaks (large bursts) and calculates charges based on 95% usage to bill the customer. The rating engine charges the entire usage if it crosses the permissible limit (above 5%). EarnBill enables businesses to implement complex use cases based on company rules using its plugin-based framework. Without affecting the system's operations.

Rating Models by Industry

Built for the Complexity You Actually Face

In today's environment of evolving technologies and intense competition, a billing system needs to be flexible enough to accommodate every business scenario. Knowing that usage patterns are dynamic and consumers are looking for cost-effective pricing.

To overcome these challenges and establish a future-proof charging system, EarnBill offers a highly flexible rating engine with numerous built-in pricing strategies, rating configurations, and customizable options to meet unique needs, so you stay on top of the competition.