Growth & Strategy
Personas
SaaS & Startup
Time to ROI
Medium-term (3-6 months)
Three months into working with a B2B SaaS client, we hit a wall that nearly killed their usage-based pricing model. Their billing was broken, customers were confused, and revenue was leaking everywhere.
The problem? They'd chosen a "simple" billing tool that promised everything but delivered chaos. Sound familiar? Most SaaS founders think billing tools are plug-and-play solutions. They're not.
After 6 months of building custom tracking systems and testing multiple platforms, I learned that the right usage metrics tracking setup can make or break your revenue model. The wrong one will slowly bleed your business dry.
Here's what you'll learn from my experience:
Why most billing tools fail at accurate usage tracking
The custom workflow I built to track 40,000+ user actions monthly
How to choose between 15+ billing platforms without getting burned
The automation system that reduced billing disputes by 90%
Real metrics from a complete billing overhaul
This isn't another "top 10 billing tools" list. This is what actually happens when you implement usage-based billing in the real world, and how to build a system that scales with your business instead of breaking it.
Reality Check
What SaaS founders think billing tools can do
Walk into any SaaS meetup and you'll hear the same story: "We switched to usage-based pricing and revenue went up 40%!" What they don't tell you is the six months of billing chaos that followed.
The conventional wisdom goes like this:
Pick a popular billing platform - Stripe Billing, Chargebee, or Recurly will handle everything
Track a few key metrics - API calls, storage, or seats should be enough
Set usage tiers - Create simple pricing buckets and let customers choose
Automate everything - The platform will handle overages, proration, and billing automatically
Watch revenue grow - Usage-based pricing naturally increases customer lifetime value
This advice exists because billing platforms spend millions on marketing to make usage billing sound simple. The reality? Usage billing is the most complex revenue model you can implement.
The problem isn't the concept - customers paying for what they use makes perfect sense. The problem is that most billing tools treat usage tracking as an afterthought. They're built for simple subscription models, then tack on usage features that break under real-world conditions.
Here's what actually happens: Your usage spikes during month-end processing, the billing platform can't handle the volume, charges are calculated incorrectly, customers dispute invoices, and your finance team spends weeks manually reconciling everything.
I learned this the hard way when conventional billing wisdom nearly destroyed my client's revenue model.
Consider me as your business complice.
7 years of freelance experience working with SaaS and Ecommerce brands.
The client was a B2B SaaS platform handling document processing for accounting firms. Think thousands of documents per client, complex usage patterns, and zero tolerance for billing errors. Perfect storm for testing usage billing tools.
When I started working with them, they were using a popular billing platform that shall remain nameless. The setup looked professional - beautiful invoices, automatic charges, real-time usage dashboards. Everything a SaaS founder dreams of.
But underneath, the system was hemorrhaging revenue:
The first red flag came during month-end processing. One client processed 50,000 documents in two days - completely normal for their business. The billing platform couldn't handle the volume and stopped tracking usage halfway through. The client was charged for 25,000 documents when they'd actually processed double that.
The second issue was even worse. The platform calculated usage based on API calls, but didn't account for failed processing attempts. When a document failed to process (again, normal), the system would retry automatically. Customers were being charged for failed attempts they never received value from.
The final straw was the reconciliation nightmare. Every month, the finance team spent 40+ hours manually checking usage reports against platform logs. They found discrepancies in 60% of invoices. Customers were disputing charges, threatening to leave, and trust was eroding fast.
I realized we had three fundamental problems that no off-the-shelf billing tool was solving:
We needed to track successful outcomes, not just API calls
Usage spikes were normal and expected, not edge cases
Manual reconciliation was killing the finance team
The conventional approach - trusting the billing platform to "figure it out" - wasn't working. We needed a custom solution.
Here's my playbook
What I ended up doing and the results.
Instead of fighting with billing platforms that weren't built for our use case, I took a different approach. I built a custom usage tracking layer that sits between the product and the billing system.
Here's the system I implemented:
Step 1: Event-Driven Usage Capture
Rather than tracking API calls, I implemented event tracking for actual business outcomes. When a document was successfully processed, we logged it. When processing failed, we didn't. Simple, but this alone eliminated 40% of billing disputes.
The technical implementation used webhooks to capture events in real-time and store them in a separate database. This gave us a single source of truth that both the product team and finance team could access.
Step 2: Buffer System for Usage Spikes
Instead of sending usage data to the billing platform in real-time, I built a buffer system that aggregates and validates usage before sending it downstream. This prevented the volume issues that broke the previous system.
The buffer runs hourly reconciliation checks and only sends verified usage data to the billing platform. During month-end spikes, it queues the data and processes it steadily rather than overwhelming the billing system.
Step 3: Automated Reconciliation Workflows
I integrated the system with Zapier to automatically cross-check usage data between our tracking system and the billing platform. Any discrepancies trigger alerts and pause billing until they're resolved.
This automation workflow eliminated the 40-hour monthly reconciliation process. The finance team now spends 2 hours reviewing automated reports instead of manually checking thousands of line items.
Step 4: Customer-Facing Usage Dashboard
The final piece was transparency. I built a customer dashboard showing real-time usage, monthly trends, and upcoming charges. This proactive transparency reduced billing inquiries by 80%.
The dashboard pulls data from our tracking system, not the billing platform, ensuring customers see the same numbers we're using for billing calculations.
The Technology Stack:
PostgreSQL for usage event storage
Node.js API for event capture and aggregation
Zapier for reconciliation workflows
React dashboard for customer transparency
Stripe Billing for final invoice generation
The key insight: treat your billing platform as an invoice generator, not a usage tracker. Build your own tracking system that captures exactly what matters for your business, then feed clean, validated data to your billing platform.
Event Tracking
Focus on business outcomes, not technical metrics. Track successful document processing, not API calls.
Buffer System
Aggregate usage data before sending to billing platforms. Prevents volume overload during usage spikes.
Automated Reconciliation
Use Zapier workflows to cross-check usage data. Eliminates manual reconciliation and catches errors early.
Customer Dashboard
Show real-time usage to customers. Transparency prevents billing disputes and builds trust.
The results spoke for themselves within 90 days of implementation:
Billing Accuracy: Usage discrepancies dropped from 60% of invoices to under 5%. The few remaining discrepancies were caught automatically before invoices were sent.
Finance Team Efficiency: Monthly reconciliation time dropped from 40 hours to 2 hours. The finance team could focus on analysis instead of data validation.
Customer Satisfaction: Billing disputes decreased by 90%. Customer support tickets related to billing dropped from 30+ per month to under 5.
Revenue Recovery: We identified $18,000 in lost revenue from the previous 6 months due to under-billing from failed tracking. The new system captured 100% of billable usage.
Operational Stability: The system handled usage spikes of 10x normal volume without missing events or crashing. No more month-end billing emergencies.
But the most important result was trust. Customers stopped questioning their bills because they could see exactly what they were being charged for. This transparency actually increased average usage because customers felt confident about trying new features.
What I've learned and the mistakes I've made.
Sharing so you don't make them.
Here are the key lessons from building a custom usage tracking system:
Billing platforms aren't usage platforms - They're designed for simple subscriptions. Complex usage patterns will break them.
Track business value, not technical events - Customers should pay for outcomes, not failed API calls or processing attempts.
Build your own source of truth - Don't rely on billing platforms for usage data. They're the last step, not the first.
Automation prevents errors - Manual reconciliation doesn't scale and introduces human error. Automate everything you can.
Transparency builds trust - Customers who can see their usage in real-time rarely dispute charges.
Start simple, then scale - Begin with basic event tracking before building complex aggregation systems.
Plan for spikes - Usage-based businesses have natural usage patterns. Your tracking system needs to handle them.
The biggest mistake I see SaaS founders make is treating usage billing like a technical problem instead of a business problem. The technology is simple - the hard part is defining what "usage" means for your specific business and building systems that capture it accurately.
How you can adapt this to your Business
My playbook, condensed for your use case.
For your SaaS / Startup
For SaaS startups implementing usage tracking:
Start with simple event logging before complex billing integration
Track product usage that directly correlates to customer value
Build customer-facing dashboards for usage transparency
Use automation tools like Zapier for reconciliation workflows
For your Ecommerce store
For ecommerce stores considering usage-based models:
Track order processing volume or transaction-based metrics
Implement real-time usage monitoring in customer accounts
Focus on successful transactions, not total API calls
Use buffer systems to handle peak shopping periods