Hiring guide
SaaS minimum commitments: test consumed usage against the floor
By CFO Index · Published
A customer commits to a monthly spending minimum and consumes less than expected. The unused difference is not automatically a credit they can spend next month. Equally, the invoice should not necessarily add the full minimum on top of usage. Reconcile the contractual floor at its actual scope before forecasting the bill. The examples below are invented operational checks, not vendor prices or revenue-recognition advice.
Define what counts toward the minimum
Record the customer, contract version, eligible charge or products, period, currency, floor and any exclusions. Establish whether the minimum applies to one usage charge, a group of products or an entire account; do not pool them without an explicit rule. Specify whether discounts reduce the consumption counted toward the floor and whether taxes or fixed fees are excluded. Keep unresolved terms visible. A sales description such as minimum commitment is insufficient to decide which invoice lines draw against it.
Check the named billing model
Lago's documented charge-level spending minimum applies to usage-based charges billed in arrears. Usage below the commitment produces a true-up for the difference, shown separately; its documentation also specifies day-based proration. This is a named implementation, not a rule for every SaaS contract. Your agreement may instead use annual commitments, different eligible charges or another adjustment convention. Confirm the signed terms and actual billing configuration rather than importing Lago's mechanics into an unrelated system.
Reproduce below-floor and above-floor cases
Hypothetical full-month contract: one eligible usage charge has a €1,000 minimum. A separate €200 subscription fee does not count toward it. All figures exclude taxes, discounts and credits. At €700 of priced eligible usage, the true-up is €300, giving €1,000 for that charge and €1,200 including the subscription. At €1,300 usage, the true-up is zero and total billing is €1,500. These synthetic assumptions make the calculation explicit; they are not proposed pricing.
| Scenario | Eligible usage | True-up: max(0, floor − usage) | Usage plus true-up | Plus excluded €200 fee |
|---|---|---|---|---|
| Below €1,000 floor | €700 | €300 | €1,000 | €1,200 |
| Exactly at floor | €1,000 | €0 | €1,000 | €1,200 |
| Above floor | €1,300 | €0 | €1,300 | €1,500 |
Do not create a wallet from unused commitment
In the first case, the €300 difference explains the true-up. It does not itself establish a purchased-credit balance, a refund or a right to consume €300 free next month. Record carry-forward only if the contract explicitly creates it, with its own eligible period and expiry rule. A separately purchased wallet is a different instrument. If, under an independently confirmed payment-allocation rule, €400 of prepaid value settles part of a €1,200 invoice, remaining cash due is €800; that settlement does not retrospectively make eligible usage €1,100.
Treat partial periods as a separate test
Assume another invented contract explicitly prorates a €1,000 floor over 15 of 30 days: the applicable floor is €500. If priced eligible usage is €400, the assumed true-up is €100. Do not then halve the €400 again if it already measures those 15 days. This example says nothing about the separate subscription fee, which needs its own rule. Test the actual start, termination or amendment dates and calendar convention; never use 30 days automatically for a real invoice or assume every minimum is prorated.
Close the reconciliation with evidence
Retain the applicable contract, priced-usage export, period cutoff, adjustment calculation and invoice references. Have another reviewer reconstruct one below-floor period and one above-floor period, then test an ineligible product and a partial period. Reconcile credits and settled cash separately. If the invoice differs, preserve both versions and assign the billing owner to resolve the rule rather than changing raw usage to force agreement. Accounting and tax owners determine recognition; this worksheet checks the bill and cash forecast, not whether commitment equals earned revenue.