To understand pricing in Billing Platform, you must first understand the levels in the hierarchy in which pricing is implemented. The flowchart below provides the high-level sequence of checking that the system does to determine the rate/price that gets reflected on a customer's bill at the end of the billing cycle.
During the rating process, pricing is taken first if the customer has an account product provisioned. If a rate is not available for the account product, it will move on to the pricing information of the Account Package Product, and so on.
The fall-back of the pricing will be the default rate specified in the product in the product catalogue.
Why is this important?
The power behind these features is the customization. An important feature of a rate class is that if you alter a rate class, every contract that inherits the rate class you changed will also change. For example if you have 50 customers on 25 contracts that are cloned from a single rate plan, you can affect all these accounts at once. If you were to increase a product price on said rate class, every account that is assigned a contract cloned from this rate class will be affected by this price increase. One thing to note is that contract rates will always take precedence over rate classes. This means from the previous example, if any of these contract rates overrides the price for the product you just changed, the price defined in the contract rate will stand.
The power behind the contract rates and rate class feature is the ability to change prices for individual entities of the application. If you have an account that qualifies for a promotion, you can apply promotional pricing to just this account, without affecting anybody else on this rate class. The same applies for provisioned products and provisioned package products.
Default Prices - Last line of rates used by the system if no pricing plans or rate classes are in effect.
Rate Classes - A collection of revised rates of products that can be used to later create pricing plans for customers. All pricing plans can be based upon rate classes. This can save a lot of time if a lot of customers use similar pricing, and only a few need variations. Please follow the link for more information.
Contract Rates - Contracts allow you to refine the pricing of existing products in the system relative to what you want to take effect to the customer.
How BillingPlatform Determines Price - Illustrates and explains the rating flow and expands on the hierarchy described above.