Billing and Revenue Management

What is Billing and Revenue Management (BRM)?

Billing and Revenue Management (BRM) is the comprehensive system that orchestrates how businesses charge customers, collect payments, and recognize revenue across their entire customer base. It serves as the financial engine powering modern subscription and usage-based business models—from calculating complex usage charges to automating invoice delivery and ensuring compliance with revenue recognition standards like ASC 606 and IFRS 15.

A Concrete Example

Consider a cloud infrastructure provider. Every second, thousands of customers spin up servers, transfer data, and consume various services. A BRM system handles:

• Real-time usage tracking across multiple services

• Tiered pricing calculations based on volume and commitment

• Regional price variations and currency conversions

• Invoice generation for thousands of accounts

• Tax compliance across jurisdictions

• Revenue recognition according to accounting standards

Without BRM automation, this level of complexity would require constant manual intervention and would inevitably produce billing errors.

Related Terms

• Revenue cycle management

• Billing operations platform

• Revenue management system

• Quote-to-cash (Q2C)

Core Functions of Modern BRM

Modern BRM systems handle five interconnected functions that keep revenue flowing accurately through your business.

1. Charging: Where Pricing Strategy Meets Execution

The charging engine translates pricing strategy into actual charges. The process typically follows this pattern:

Usage capture — When a customer uses your service, the BRM system records the event. For a video platform, this is minutes watched. For an API company, it's the number of calls.

Rating — The system applies pricing rules, accounting for base rates, volume tiers, customer-specific discounts, and any promotional pricing in effect.

Balance validation — For prepaid or credit-limited accounts, the system verifies available balance before allowing continued usage.

Modern BRM systems handle hybrid pricing models—combining subscriptions with usage overages, one-time fees, and tiered discounts within a single customer account.

2. Billing: From Charges to Collected Revenue

The billing engine transforms accumulated charges into invoices and ensures they reach customers through appropriate channels.

The flow moves from charge aggregation to invoice generation, then to multi-channel delivery, payment processing, and finally revenue recognition.

Modern billing must accommodate:

• Consolidated billing for enterprise accounts with multiple subsidiaries

• Split billing when different cost centers require separate invoices

• Automated payment collection via stored payment methods

• Flexible billing schedules — monthly, quarterly, annual, or custom cycles

3. Balance Management: Financial Accuracy

Balance management tracks every transaction affecting what customers owe:

This function becomes critical for businesses offering prepaid services or enforcing credit limits, where real-time balance accuracy determines service availability.

4. Customer Management: Beyond the Invoice

Customer management connects financial systems to the customer experience. RevOps teams leverage BRM data to:

• Prevent churn by identifying payment failures or usage anomalies early

• Automate dunning with configurable retry logic and escalation paths

• Enable self-service where customers view usage, download invoices, and update payment methods

• Configure usage alerts before customers approach plan limits

For businesses operating in the EU, GDPR compliance adds requirements around data retention policies and customer data access requests within the BRM system.

5. Business Intelligence: Revenue Insights

The BI layer transforms billing data into actionable metrics:

• Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) tracking

• Revenue per account trends

• Churn analysis and early warning indicators

• Payment failure rates by payment method

• Pricing model performance comparisons

Benefits for Subscription and Usage-Based Businesses

Operational Efficiency Through Automation

BRM systems eliminate manual work that consumes finance team bandwidth. The shift looks like this:

Manual processes:

• Invoice creation taking days each billing cycle

• Error-prone usage calculations in spreadsheets

• Delayed revenue recognition and reporting

• Rigid pricing that requires engineering changes

Automated BRM:

• Billing cycles that run without intervention

• Accurate usage tracking and rating

• Real-time revenue visibility

• Pricing changes configurable without code

Cloud-Native Architecture Advantages

Cloud-based BRM solutions provide:

Compliance infrastructure — SOC 2, PCI DSS, and regional data protection maintained by vendors with dedicated security teams.

Elastic scalability — Handle transaction volume spikes without capacity planning.

Continuous updates — New features and integrations deploy automatically.

Supporting Pricing Model Evolution

As more businesses adopt usage-based and hybrid pricing, BRM systems enable:

• Hybrid models combining fixed subscriptions with variable usage

• Value-based metrics tied to outcomes customers care about

• Granular pricing at the API call, gigabyte, or seat level

• Dynamic pricing that adjusts based on demand or customer segment

Implementation Approach

Phase 1: Requirements Definition

Map your billing complexity first:

• How many distinct pricing models do you support today?

• What's your current and projected transaction volume?

• Which systems require integration (CRM, ERP, payment gateways)?

• What compliance requirements apply (tax, revenue recognition, data privacy)?

Phase 2: Integration Architecture

A typical BRM integration connects:

• CRM providing customer data and contract terms

• Product systems feeding metering and usage data

• Accounting systems receiving invoices and journal entries

• Payment gateways processing transactions

• Data warehouse storing historical data for analytics

Phase 3: Phased Rollout

A staged approach reduces risk:

Weeks 1-2: Configure pricing models and validate with pilot customers
Weeks 3-4: Integrate payment processing and accounting systems
Weeks 5-6: Migrate existing customers in batches, validating accuracy
Weeks 7-8: Enable advanced features like automated dunning and analytics dashboards

Start with your simplest pricing model and add complexity incrementally. This approach helps your team build familiarity with the system before tackling edge cases.

Industries Where BRM is Essential

While BRM originated in telecommunications, it now serves any business with complex pricing:

• Cloud Infrastructure — Providers like AWS tracking compute, storage, and bandwidth consumption

• API Companies — Businesses charging per transaction, message, or API call

• SaaS Platforms — Applications with user-based, feature-based, or usage-based tiers

• IoT Services — Platforms billing for device connections and data transmission

• Media and Streaming — Services tracking content consumption across quality tiers

What Comes Next for BRM

As pricing models grow more sophisticated, BRM systems are evolving to support:

• Embedded billing within product experiences, reducing friction

• Automated tax compliance for global expansion

• Revenue forecasting based on usage patterns and cohort behavior

• Real-time pricing experiments to optimize monetization

The businesses that invest in billing and revenue management infrastructure today position themselves to iterate on pricing strategy without engineering bottlenecks—capturing more value while maintaining the billing accuracy that customer trust requires.