Minimum commitment

A minimum commitment is the least a customer agrees to pay in a billing period, whatever their actual usage. If rated usage comes to less, a true-up line charges the difference; if it comes to more, the customer pays the usage. It is common in enterprise and usage-based contracts, often exchanged for a lower unit rate.

How it works

• A contract states the minimum per period — for example $5,000 a month — alongside the usage price.
• At period close usage is rated as normal.
• If the rated amount is below the minimum, the invoice carries a true-up to reach it.
• A spend cap is the mirror image: a ceiling on what the period can bill, however much usage runs on.

Some contracts commit over a year instead of a month, with ramps that step the commitment up over time.

Why it matters

A commitment gives the seller predictable revenue and the buyer a better rate. Tracked in a spreadsheet, true-ups are the line that gets forgotten — revenue the contract already guaranteed.

How Fynex does it

Fynex prices usage with an optional minimum and spend cap per metric per contract, applied in a fixed order after rating, so the true-up and the cap appear on the invoice automatically. Any configuration can be previewed at any quantity before it is agreed. See Usage-Based Billing.