What is Microsoft Billing?

Billing is where you can manage your accounts, invoices, and payments. Billing is available to anyone with access to a billing account or other billing scope, like billing profiles and invoice sections. The cloud finance team and organizational leaders are typically included.

A few examples of what you can do in Billing include:

How charges are processed

To understand how Billing works, you should first understand the Commerce system. At its core, Microsoft Commerce is a data pipeline that underpins all Microsoft commercial transactions, whether consumer or commercial. There are many inputs and connections to the pipeline. It includes the sign-up and Marketplace purchase experiences. However, we'll focus on the pieces that make up your cloud billing account and how charges are processed within the system.

Diagram showing the Commerce data pipeline.

In the left side of the diagram, your Azure, Microsoft 365, Dynamics 365, and Power Platform services are all pushing data into the Commerce data pipeline. Each service publishes data on a different cadence. In general, if data for one service is slower than another, it's due to how frequently those services are publishing their usage and charges.

As the data makes its way through the pipeline, the rating system applies discounts based on your specific price sheet and generates rated usage, which includes price and quantity for each cost record. It's the basis for what you see in Cost Management, but we'll cover that later. At the end of the month, credits are applied and the invoice is published. The process starts 72 hours after your billing period ends, which is usually the last day of the calendar month for most accounts. For example, if your billing period ends on March 31, charges will be finalized on April 4 at midnight.

Important

Credits are applied like a gift card or other payment instrument before the invoice is generated. While credit status is tracked as new charges flow into the data pipeline, credits aren't explicitly applied to these charges until the end of the month.

Everything up to this point makes up the billing process. It's where charges are finalized, discounts are applied, and invoices are published. Billing account and billing profile owners may be familiar with this process as part of the Billing experience within the Azure portal or Microsoft 365 admin center. The Billing experience allows you to review credits, manage your billing address and payment methods, pay invoices, and more – everything related to managing your billing relationship with Microsoft.

After discounts are applied, cost details then flow into Cost Management, where:

Lastly, cost details are made available from cost analysis in the Azure portal and published to your storage account via scheduled exports.

How Cost Management and Billing relate

Cost Management is a set of FinOps tools that enable you to analyze, manage, and optimize your costs.

Billing provides all the tools you need to manage your billing account and pay invoices.

Cost Management is available from within the Billing experience. It's also available from every subscription, resource group, and management group in the Azure portal. The availability is to ensure everyone has full visibility into the costs they're responsible for. And, so they can optimize their workloads to maximize efficiency. Cost Management is also available independently to streamline the process for managing cost across multiple billing accounts, subscriptions, resource groups, and management groups.

Diagram showing how billing organization relates to Cost Management.

What data is included?

Within the Billing experience, you can manage all the products, subscriptions, and recurring purchases you use; review your credits and commitments; and view and pay your invoices. Invoices are available online or as PDFs and include all billed charges and any applicable taxes. Credits are applied to the total invoice amount when invoices are generated. This invoicing process happens in parallel to Cost Management data processing, which means Cost Management doesn't include credits, taxes, and some purchases, like support charges in non-Microsoft Customer Agreement (MCA) accounts.

The classic Cloud Solution Provider (CSP) and sponsorship subscriptions aren't supported in Cost Management. These subscriptions will be supported after they transition to MCA.

For more information about supported offers, what data is included, or how data is refreshed and retained in Cost Management, see Understand Cost Management data.

Manage your billing account and invoices

Microsoft has several types of billing accounts. Each type has a slightly different experience to support the unique aspects of the billing account. To learn more, see Billing accounts and scopes.

You use billing account management tasks to:

Management for classic Cloud Solution Provider (CSP) and classic sponsorship subscriptions isn't available in Billing or Cost Management experiences because they're billed differently.

Report on and analyze costs

Cost Management and Billing include several tools to help you understand, report on, and analyze your invoiced Microsoft Cloud and AWS costs.

For more information, see Get started with Cost Management and Billing reporting.

Organize and allocate costs

Organizing and allocating costs are critical to ensuring invoices are routed to the correct business units and can be further split for internal billing, also known as chargeback. Cost Management and Billing offer the following options to organize resources and subscriptions:

Cost allocation is the set of practices to divide up a consolidated invoice. Or, to bill the people responsible for its various component parts. It's the process of assigning costs to different groups within an organization based on their consumption of resources and application of benefits. By providing visibility into costs to groups who are responsible for it, cost allocation helps organizations track and optimize their spending, improve budgeting and forecasting, and increase accountability and transparency. For more information, see Cost allocation.

How you organize and allocate costs plays a huge role in how people within your organization can manage and optimize costs. Be sure to plan ahead and revisit your allocation strategy yearly.

Monitor costs with alerts

Cost Management and Billing offer many different types of emails and alerts to keep you informed and help you proactively manage your account and incurred costs.

For for information, see Monitor usage and spending with cost alerts.

Optimize costs

Microsoft offers a wide range of tools for optimizing your costs. Some of these tools are available outside the Cost Management and Billing experience, but are included for completeness.

For other options, see Azure benefits and incentives.

Next steps

Now that you're familiar with Billing, the next step is to start using the service.