Cloud and infrastructure services · Software and SaaS
Cloud resale and managed-infrastructure margin, reconciled account by account
A cloud partner buys consumption from a hyperscaler in one currency, on one set of discounts and credits. It sells that consumption to customers in rupees on different terms, with managed services on top. We reconcile the two sides account by account, so the margin on each customer is a number rather than an estimate.
In one paragraph
Cloud resellers and managed service providers, hosting and colocation firms and infrastructure-management businesses usually turn over ₹20–400 crore, much of it pass-through consumption. For their owners and finance heads, revenue is large and margin is thin. That margin depends on discounts, credits and exchange rates held in the provider's statements, not in the firm's own ledger.
Managing director or CFO, often with the head of cloud operations
The economics
How the money moves in this trade
For a cloud reseller, the cost of revenue arrives as a provider bill covering hundreds of customer accounts. It is adjusted by partner discounts, programme credits, marketplace charges and commitments. Customers are then invoiced from usage data, often with a markup or discount of their own and sometimes in a different currency. Any account consumed but not re-billed, or billed at the wrong rate, is lost margin that nobody sees in the aggregate.
Credit risk sits with the partner: the provider is paid whether or not the customer pays. Managed services, migration projects and support add a people cost on top. For hosting and colocation firms, power is the largest variable cost. It is often recovered from tenants on a formula that may no longer match the actual tariff.
The problem
Where the numbers usually break down
Provider bill not reconciled to customer invoices
Consumption is billed from a usage export, and nobody checks that every linked account on the provider's bill was invoiced to someone.
Credits and discounts kept centrally
Partner discounts, programme credits and funded proofs of concept reduce the bill as a whole and are never attributed to the customers they relate to.
Currency exposure taken by accident
The provider bills in dollars while customers pay in rupees, and the exchange difference between consumption and settlement lands in a single gain-or-loss line.
Customer credit risk on consumption
Customers can run up consumption faster than they pay, and the firm's exposure to each is not tracked against a limit.
Power recovery out of date
Colocation contracts recover power on a formula agreed years ago, and the recovery is never compared with the actual electricity bill.
What we do
The work, and the result each part produces
Account-level consumption reconciliation
Every account on the provider bill matched to a customer invoice, with unbilled and mis-rated accounts listed each month.
No consumption goes unbilled.
Credit and discount attribution
Discounts, credits and programme funds allocated to the customers and projects that earned them.
Customer margin reflects the true net cost.
Currency exposure reporting
Dollar-denominated cost and rupee-denominated billing matched by period, with the exchange difference reported by customer.
Currency loss is visible and can be priced in.
Customer exposure limits
Consumption, invoices and collections tracked against an exposure limit per customer, with alerts for accounts that breach it.
Credit risk is managed before consumption runs ahead of payment.
Managed-service costing
Engineer time on managed services, migrations and support booked against customers.
The service layer shows whether it earns its keep.
Power and space recovery review
Power recovered from colocation tenants compared with metered consumption and the actual tariff.
Power cost is recovered as contracted.
Where we start
The first steps of an engagement
Provider bills and billing exports
We ask for the hyperscaler's partner bills and credit statements, customer invoices from the re-billing platform and the account-to-customer mapping. For colocation, we also ask for power bills and meter readings.
Account-level consumption match
Every account on the provider bill is matched to a customer invoice. Unbilled and mis-rated accounts are listed.
Credits attributed, exposure limits set
Discounts and credits are allocated to the customers that earned them, and an exposure limit is set for each customer.
Customer margin after credits
The first report shows gross margin by customer after credits and discounts, with exchange difference and exposure against limit.
How it is measured
The reports the work is judged on
Each is recorded as a baseline before the work starts, so later reports have an honest comparison.
- Provider consumption reconciled to customer billing, by account
- Gross margin by customer after credits and discounts
- Exchange difference by customer and period
- Customer exposure against limit
- Managed-service margin by customer
- Power recovered against power consumed, by site
Who it suits
Written for, and not the right fit for
- You want cloud cost engineering or architecture changes; we report the numbers, and your engineers optimise the estate.
- You need the statutory audit signed; an independently engaged CA does that.
- Cloud resellers and managed service providers billing hyperscaler consumption to many customers.
- Hosting and colocation firms recovering power and space cost from tenants.
- Firms whose consumption billing has outgrown spreadsheets.
Services
Services this work draws on
Outsourced accounting
Your books kept current and reconciled, closed to a published calendar.
Explore service ↗Costing and profitability
What each product, line and customer really contributes.
Explore service ↗Finance technology and automation
Systems configured around your process, not the other way round.
Explore service ↗Internal controls and risk
Controls sized to your business, documented and actually tested.
Explore service ↗Every other service, also available in this trade
Common questions
Questions owners in this trade ask
Our billing platform handles re-billing. Why reconcile again?
Because the platform bills what it's told about. Accounts added at the provider but not mapped in the platform, rate changes that weren't applied and credits that arrive later all fall outside it. A monthly account-level check catches what the platform can't see.
How should provider credits be passed on to customers?
That depends on your contracts. What matters for the books is that each credit is recorded against the customer or project it relates to, and that what you pass on is consistent with what you agreed.
Do you advise on hedging currency risk on cloud resale?
No. We measure and report the exposure and its cost by customer, which is what pricing and billing-currency decisions need. Hedging decisions and products are for you and your bank.
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