Questions and answers on AWS Billing Conductor

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We received many great questions since we launched AWS Billing Conductor (3/17/2022), a new service that simplifies your billing and cost allocation needs (see announcement | blog | getting-started resources| user guide).  Matt Cowsert, our Senior Product Manager recently shared how you can use AWS Billing Conductor to meet your showback and chargeback needs in the April CFM Talk. You can also hear how Evan McLean, Product Owner from Stax uses AWS Billing Conductor to solve their cost management needs in last month’s peer connect event.

Q. Is AWS Billing Conductor free to use, or will I be charged each time I generate an invoice?

Your usage of AWS Billing Conductor is not calculated by the number of invoices generated, rather the number of hourly pro forma billing records. Generating invoices with the AWS Billing Conductor billing data set is not a feature that is currently supported. For context, your first one million pro forma billing records are free each month, and after that, the additional pro forma billing records cost you $0.15 per 1,000 records.

Q. In the AWS Billing Conductor view, what does “Charged Amount” and “AWS Costs” include, and not include?

The Charged Amount Key Performance Indicator (KPI) is an aggregated calculation across all billing groups. The calculation is derived by using the service usage accruing within a billing group at the rates defined by the pricing rules for each group. The Charged Amount also includes any custom line items that have been created as well. The Charged Amount does not take into consideration your AWS credits, aggregate volume-based discounts, negotiated AWS agreements, or taxes.

For the AWS Costs KPI, we evaluate the same set of accounts, but this calculation is inclusive of AWS credits, aggregate volume discounts, applied commitment-based discounts (Savings Plans and reserved instances), negotiated AWS agreements, and tax.  Therefore, your “margin” is the delta between “Charged Amount” and you “AWS Costs”.  You can choose to distribute the “margin” to all your billing groups as you set your pricing parameters, or keep the difference as profit.

Q. How can I share AWS credits, commitment-based discounts, or other shared costs within the billing groups?

As credits are not included in the pro forma computation generated by AWS Billing Conductor, your mechanism for sharing credits is to include them in the pricing rule or create a credit custom line item and apply it to the specific billing group you want to adjust.  Specifically, you can consolidate all the shared costs and discounts and reflect them as markups or discounts in the service-specific and global pricing rules.  Alternatively, you can create a one-time-use “custom line” item of these shared costs/benefits for the current or previous billing period. The custom line items can be in the format of flat credit or fee, or they can also be a percentage charge of a value, such as the gross costs of the billing group, or another custom line item, e.g. support fee, tax, RI/SP savings, etc.

You can use “custom line” for the current billing period or the previous month.

Q. Can I assume that the higher AWS spend leads to higher AWS Billing Conductor cost?

No, there is not a linear relationship between higher AWS spend and higher AWS Billing Conductor costs. AWS Billing Conductor costs are calculated by the number of resources running in your account (and the interactions between those resources). It’s possible to have high spend on AWS without creating a high number of resources, hence fewer number of billing records, leading to a lower AWS Billing Conductor cost. An example of this is purchasing savings plans. It is also possible to create and interact with many resources which are low cost, but generate a high volume of billing records, increasing your AWS Billing Conductor costs. Examples of high billing record behaviors include high volume object storage interactions (e.g., high-frequency ListObjects calls) and high volume of Amazon EBS snapshots.

Q. How can I customize the billing rate? Help me understand the pricing rule, pricing plan, etc.

You can customize the billing rates in AWS Billing Conductor by creating pricing rules. Pricing rules are available for individual AWS services (service-specific) or all services (a global rule). A pricing rule can be associated with one or multiple pricing plans. If there are several pricing rules within a pricing plan, say, there is a service-specific rule to add a markup of 5% for Amazon EC2, and a global rule to add a deduction of 3% for all services, the more granular rule (in this case the markup for EC2) will be run first, before the global rule is applied to the remaining services. Pricing rules do not stack. Pricing plans are resources that contain a collection of pricing rules you want to apply to one or many billing groups. Pricing plans without pricing rules default all usage within a billing group to the AWS On-Demand rate. Ultimately, your application of pricing rules will depend on your internal cost allocation logic or the agreement terms between you and your end customers.

The chart below explains the relationship among the features within AWS Billing Conductor.

Q. Does AWS Billing Conductor work with Cost Categories?  If so, how?  If not, what’s the difference between these two cost management capabilities?

While AWS Billing Conductor doesn’t integrate with Cost Categories directly, Cost Categories activated at the payer account are reflected within the AWS Billing Conductor-sourced CURs per billing group (for usage that matches a Cost Category). Functionally, Cost Categories and AWS Billing Conductor are meant to serve different customer needs. Cost Categories is a cost management feature that allows you to group and view your cost and usage information at various dimensions, for instance, by tags, AWS service, accounts, charge types. Once Cost Categories are set up, you can filter your cost and usage information by a specific Cost Category item in your Cost and Usage report, Cost Explorer, and set up a budget threshold and reporting for a specific Cost Category item in AWS Budgets.  Cost Categories is useful for the payer/management account owner to understand cost drivers within the organization, allocate and monitor costs at the specific dimensions that aligns with your organizational planning and budgeting process.

AWS Billing Conductor recomputes the billing records based on the pricing parameters you (management/payer account) set for each billing group.  Accounts within those billing groups can then see the pro forma billing data in their bills page view as well as in their CUR files, depending on their assignment within the billing group.  For example, the primary account within the billing group can view bills and generate CUR reports for all user accounts within the billing group, while the non-primary accounts can only access the information of themselves. If showback or chargeback activities are not a use case you’re looking to support, AWS Billing Conductor may not be the right service for you.

Q. How are the results of Billing Conductor presented? Does the AWS Billing Conductor report show costs by service, by resource, or the aggregated costs on an account level?

AWS Billing Conductor-generated billing data is reflected in the same level of granularity you’re used to today on your AWS Bills page as well as in the Cost & Usage Report. Payer/Management accounts can see billing details and generate CURs for billable billing data (how AWS invoices you) as well as the pro forma billing data per billing group (based on their AWS Billing Conductor configuration). As a primary account of a billing group, you will be able to view billing and generate CUR for all the member accounts in the billing group.

Q. Is this a single interface such as Cost Explorer on the master payer account or by separate Billing Conductor CUR files?

There is a single AWS Billing Conductor interface for you to create billing groups and set pricing parameters. Once done, the pro forma information will be available on your billing page and cost management tools, e.g. Bills, and Cost and Usage reports.  Currently, the pro forma information is not available in Cost Explorer or Budgets.  We are collecting customer feedback to understand the next sets of cost management tools we want to integrate and have the pro forma information available.

Q. Can I add tax on “AWS Charges” on billing conductor or is that on AWS costs only?

Tax is not included in the “Charged amount” calculations, however, they are included in the “AWS Costs”.  If you’d like to add tax to the charged amount values you can, using the custom line item feature and specifying a flat or percentage fee line item type. You can choose to calculate tax for AWS charges as well as non-AWS charges.

Q. Is the “AWS Costs” in the Billing Conductor real-time, like there is an automatic application of things like credits, negotiated terms, and commitment-based credits?

AWS Costs do take your AWS credits and discounts into consideration, however, there is certain data latency up to 8 hours (similar to other billing and cost management services).

Q. What was the rationale for putting accounts into mutually exclusive billing groups?

The mutual exclusivity allows accurate billing management for all accounts and the granular access control to billing and cost and usage information. This approach also ensures that usage isn’t double counted and removed the need to track complex pricing logic if accounts can belong to several billing groups or when you move accounts from one billing group to another. AWS Billing Conductor intends to map your AWS billing data output to your company’s financial hierarchy. Based on your internal cost allocation approach, you will apply rating adjustment to a set of accounts that share the same financial owner.