Consolidated billing is a feature of AWS Organizations that allows you to combine multiple AWS accounts into a single organization and receive one bill for all accounts. This feature provides several key benefits for businesses managing multiple AWS accounts.
First, consolidated billing simplifies…Consolidated billing is a feature of AWS Organizations that allows you to combine multiple AWS accounts into a single organization and receive one bill for all accounts. This feature provides several key benefits for businesses managing multiple AWS accounts.
First, consolidated billing simplifies the payment process by generating a single bill for all member accounts within an organization. Instead of managing separate invoices for each AWS account, the management account (formerly called master account) receives one comprehensive bill that details charges across all linked accounts.
Second, consolidated billing enables volume pricing discounts. AWS offers tiered pricing where costs decrease as usage increases. When accounts are consolidated, the usage from all member accounts is aggregated together. This combined usage can help organizations reach higher volume tiers faster, resulting in lower per-unit costs. For example, if three accounts each use 100 GB of S3 storage, the consolidated usage of 300 GB might qualify for better pricing than each account would receive separately.
Third, Reserved Instance and Savings Plans benefits can be shared across the organization. If one account purchases Reserved Instances but does not fully utilize them, the unused capacity can be applied to matching usage in other member accounts within the organization.
Fourth, consolidated billing provides better cost tracking and management. Organizations can view detailed usage reports broken down by individual accounts while still maintaining the benefits of aggregated billing. Cost allocation tags can be used to track spending by project, department, or any custom category.
The management account is responsible for paying all charges incurred by member accounts. However, member accounts maintain their operational independence and can still access their own billing information through AWS Cost Explorer and detailed billing reports.
Consolidated billing is offered at no additional cost, making it an attractive option for organizations seeking to optimize their AWS spending while maintaining clear visibility into account-level usage patterns.
Consolidated Billing is a feature of AWS Organizations that allows you to combine billing from multiple AWS accounts into a single payment method. It enables a management account (formerly called master account) to pay for all member accounts, providing a unified view of charges across your entire organization.
Why is Consolidated Billing Important?
1. Simplified Billing Management: Instead of managing separate bills for each AWS account, you receive one bill for all accounts in your organization.
2. Volume Discounts: AWS aggregates usage across all accounts to qualify for volume pricing tiers. This means the combined usage of all accounts can help you reach discount thresholds faster.
3. Cost Tracking: You can track costs for each account separately while still benefiting from consolidated payment.
4. Reserved Instance Sharing: Reserved Instances and Savings Plans purchased in one account can be shared across all accounts in the organization, maximizing utilization and cost savings.
5. Free Feature: Consolidated Billing is provided at no additional charge by AWS.
How Does Consolidated Billing Work?
1. You create an AWS Organization with a management account.
2. You invite or create member accounts to join the organization.
3. The management account becomes responsible for paying charges incurred by all member accounts.
4. AWS combines the usage from all accounts to calculate volume discounts.
5. Each account maintains its own resources, permissions, and access while sharing the billing relationship.
6. The management account receives a single monthly bill with itemized charges for each member account.
Key Benefits to Remember:
- One bill for multiple accounts - Volume pricing discounts across all accounts - Shared Reserved Instances and Savings Plans - Easy cost tracking per account - No additional cost for the feature itself
Exam Tips: Answering Questions on Consolidated Billing
1. Volume Discounts: When a question mentions achieving lower prices through combined usage across multiple accounts, Consolidated Billing is likely the answer.
2. AWS Organizations Connection: Remember that Consolidated Billing is a feature of AWS Organizations. Questions may reference either term.
3. Reserved Instance Sharing: If asked how to share Reserved Instances across accounts, Consolidated Billing through AWS Organizations is the solution.
4. Single Payer Scenarios: Questions describing a company wanting one payment method for multiple accounts point to Consolidated Billing.
5. Cost Allocation: You can still see individual account charges even with Consolidated Billing. This helps with departmental cost allocation.
6. Account Limit: By default, you can have up to 4 accounts in an organization, but this can be increased by contacting AWS Support.
7. No Additional Charge: If asked about the cost of Consolidated Billing, remember it is a free feature.
8. Management vs Member Accounts: The management account pays; member accounts are linked. Understand this hierarchy for exam scenarios.
Common Exam Scenarios:
- A company with multiple departments wants simplified billing → Consolidated Billing - An organization wants to maximize Reserved Instance usage across accounts → Consolidated Billing - A business seeks volume discounts by combining AWS usage → Consolidated Billing