Glossary / Monthly minimum
Glossary
Monthly minimum
A floor on what you pay, whatever the volume — and sometimes a true-up that bills the gap.
What it means
Two shapes, and they are not the same. A floor says your bill will not go below a number. A true-up says that if your activity priced out below the minimum, the difference gets added as its own line.
What goes wrong
The minimum is applied in a month that already cleared it, so you pay the floor and the activity. Or a true-up is billed on gross activity before credits rather than after. Both look like a single extra line on an invoice with six lines on it.
The arithmetic
Contract · minimum $5,000.00 per month, as a floor.
Activity, priced from the rate card $6,180.00
Minimum $5,000.00
The floor is already cleared. No minimum line is due.
The invoice showed
Fulfillment activity $6,180.00
Monthly minimum $5,000.00
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$11,180.00
Overbilled $5,000.00How to check it
Price the month's activity on its own first. If activity already exceeds the minimum, no minimum line should exist at all.
Read next
True-upA line that bills the gap between what your activity cost and what a minimum required.Rate cardThe pricing schedule attached to a fulfillment contract — every charge, its unit, and its rate.Volume tierA rate that changes once you pass a threshold — $1.25 per carton up to 200, $0.95 after that.