Billing Rules

Last updated: September 9, 2026

Overview

Billing Rules in Kion support three categories of modification, all managed through the Billing Rules page in the Kion portal:

  1. Cost allocation: distributes existing cloud spend from its source across Scopes or projects. Covered in Shared Cost Allocation.
  2. Custom line items: adds costs external to Kion into spend reporting. Covered in Custom Line Items.
  3. Cost adjustments (Rate Adjustments, Markups, Discounts): modify spend at the billing source level to reflect reseller pricing, currency conversion, or managed service rates. Covered in Rate Adjustments, Markups, and Discounts.

Cost allocation and custom line items both operate on Kion's Scopes abstraction and share the same prerequisites (below). Rate Adjustments/Markups/Discounts operate directly on billing sources and have their own, stricter permission model; see that section.

Shared Foundations (Scopes & Segments)

Applies to Shared Cost Allocation and Custom Line Items. Rate Adjustments/Markups/Discounts do not use Scopes; see that section for its own requirements.

Requirements and Prerequisites

Cost allocation and custom line items both operate using Kion's Scopes abstraction. Scopes define the business context that costs are allocated into.

  • When selecting destinations for a Billing Rule, you can select Scopes directly, or, if allocating by OU or Project, select any active project or OU with descendant active projects.
  • If a project doesn't already have a Scope, Kion can create one on your behalf automatically during rule setup. You can provide a name, or leave it blank for a Kion-generated name. You don't need to pre-create Scopes manually, though you can create "empty" Scopes ahead of time if desired.
  • Destination Scopes must have active segments covering the allocation period. A Scope's lifetime is defined by its segments. Billing Rules and Custom Line Items only produce spend within the destination Scope's configured timeframe. If a rule starts before a Scope's segment begins, those earlier months won't appear in that Scope's reporting.

For the difference between Shared Cost Allocation and Scopes generally, see FinOps Scopes vs. Shared Cost.

Permissions

Requirement Details
Manage Billing Rule Required to create and manage Billing Rules (governs both Shared Cost Allocation and Custom Line Items).
View Billing Rules Read only: lets a user see rules that have been created without managing them. Applies across all billing rule types, including Allocation and Custom Line Items.
Standard spend reporting access No additional permission is needed to view allocated or custom costs in spend reports beyond standard access to the associated projects.

Billing Rules and Segments

A Billing Rule defines what cost to capture (or generate) and where to send it. Every Billing Rule, regardless of type (Allocation, Custom Line Item, or Rate Adjustment/Markup/Discount), is organized into Segments, distinct time periods within the rule's life. This lets allocation logic evolve over time (e.g., percentages or destinations changing) without losing historical accuracy, and lets you update criteria for a specific date range without triggering a full reprocessing of the rule's entire history.

A few rules apply to all segments, regardless of rule type:

  • Segments cannot overlap, and there can't be gaps between them. Kion handles both automatically: an edit that overlaps an existing segment overrides the overlapping portion on save; an edit that would create a gap is flagged and blocked until resolved.
  • Only the first or last segment in a rule can be deleted. To remove a middle segment, remove the segments around it first. To change a segment's configuration without deleting it, use Edit instead.

Shared Cost Allocation

What It Does

Shared Cost Allocation targets spend from one or more sources and distributes it across Scopes using a method you define. You define the source using the same criteria engine used by Scopes, then choose how the cost is split: evenly, by fixed percentage, or proportionally based on each destination Scope's (or project's) relative spend. Once configured, allocated costs appear alongside direct cloud spend in each Scope's reports.

Allocation Methods

  • Even Split: divides the total cost equally across all destination Scopes regardless of size or consumption. Simplest starting point; works well for teams with comparable footprints, or when fairness by team membership matters more than usage.
  • Percentage-Based: assign explicit percentages to each destination Scope. Percentages may total less than 100%; any remainder stays with the origin account and does not appear as a separate "unallocated" line anywhere in reporting. Percentages cannot exceed 100%.
  • Proportional: distributes cost based on each destination Scope's relative share of spend. Use when usage should drive the allocation each month. Each spend type gets its own proportional calculation, so switching spend types can change the allocated amounts.

Important distinction for this method:

  • Scope spend: cost a Scope directly captures based on its own criteria (accounts, services, tags, etc.).
  • Project spend: total cloud spend across all accounts/Scopes in the underlying project.

⚠️ Proportional allocation only considers spend directly attributed to a Scope. Costs shared into a Scope via another Billing Rule (allocation or custom line items) are not factored into the proportion calculation. If your Scopes get a significant share of their cost from other allocations, account for that when choosing a proportional basis.

Spend Types and Behavior for Discounts, Credits, and Refunds

Kion supports four spend types: billed, list, amortized, and attributed. How allocation handles credits, discounts, and refunds depends on which spend type the rule targets.

Billed or list spend:

  • Credits, discounts, and refunds are not automatically included when you target a service. Selecting "EC2" captures EC2 charges only. Discounts/credits need their own criteria entry.
  • This also means you can specifically target and share out credits, discounts, or refunds, e.g., payer-level credits you want distributed to specific Scopes.

Amortized or attributed spend:

  • Discounts and refunds are automatically bundled with the selection. Selecting "EC2" captures EC2 charges and their associated discounts with no extra criteria.
  • Credits remain separate and must still be added explicitly.
  • Because discounts are bundled in, you cannot target and allocate discounts or refunds specifically under these spend types (credits can still be targeted specifically).

Credits, refunds, and discounts that flow through allocation rules are distributed based on each Scope's proportion of amortized and attributed cost. If your organization primarily views billed or list spend, you may see slight differences in allocation percentages for credit/discount line items. Regular spend is calculated correctly for each spend type independently.

Setup

Step 1: Identify the Shared Cost Pool. Decide what spend to share. Typical candidates: shared VPCs/networking, centralized logging and monitoring, security tooling, cloud provider support plans. Define the pool using criteria the same way you would for a Scope: select accounts, then service/region/tag/other dimensions. See Working with Criteria.

Step 2: Identify Destination Scopes. Determine which projects or OUs represent the teams/applications that benefit. You can target individual Scopes, projects, or an entire OU. Confirm each destination project's Scope has an active segment covering the months you want to allocate into. Auto-created Scopes start at creation time, so historical months won't populate unless the segment is backdated.

Step 3: Create a Billing Rule.

  1. Navigate to Billing Rules in the Kion portal.
  2. Select Create Billing Rule → choose Allocation as the rule type.
  3. Select a timeframe for your first segment.
  4. Select source criteria to identify the costs to allocate.
  5. Select a distribution type (Even Split, Percentage-Based, or Proportional).
  6. Select destination Scopes: individual projects or an OU (an OU applies the rule to all active projects underneath it). If a project has no Scope, either let Kion auto-create one with a name you provide, or leave it blank for a generated name.
  7. Save the rule and allow processing to run.

Once processing completes, allocated costs appear in each destination Scope's spend report alongside direct cloud charges.

Priority Ordering Between Allocation Rules

When multiple allocation rules target overlapping criteria:

  • Rules are evaluated in the order they were created.
  • If criteria targets the same set of spend, the rule created first captures it. Allocation rules cannot be manually re-prioritized like Scopes. Editing segments or deleting rules are the only ways to resolve competing criteria.
  • Example: two rules both target the tag "Owner:Kion"; the rule created first (in list order) gets that spend.

Troubleshooting

Allocated costs are not showing in a destination Scope. Confirm the destination Scope has an active segment covering the reporting period, and that the Billing Rule's segment timeframe overlaps with it. Costs for months before the Scope's segment start date won't appear even if the rule covers those months. Verify processing has completed (see the financial processing banner at the top of the page). Also verify criteria logic: for AND, all conditions must be true; for OR, any condition must be true.

Proportional allocation percentages look different depending on the spend type I'm viewing. Expected. Percentages are calculated using billed spend as the basis and stay consistent across spend types; dollar amounts adjust to reflect each type's actual values. Slight percentage differences for credits/discounts are expected; those are distributed based on each Scope's proportion of amortized and attributed cost.

Discounts aren't appearing in my shared cost allocation when using billed spend. Discounts aren't automatically included on billed/list spend selections. Add explicit criteria targeting the discounts you want included. On amortized/attributed spend, discounts are bundled automatically.

Custom Line Items

What They Do

Custom Line Items let you create charges that don't originate from any bill and assign them to one or more Scopes, e.g., software licenses, contractor engagements, internal platform fees. Once added, these costs appear in Kion spend reports and exports alongside cloud provider charges.

(Requirements, prerequisites, and permissions are the same as Shared Cost Allocation; see Shared Foundations above.)

When to Use Custom Line Items

  • Software licenses tied to a specific team or application
  • Professional services or consulting costs for cloud initiatives
  • Internal platform or enablement fees
  • Any cost that exists outside the cloud bill but belongs in a team's financial reporting

Setup

Step 1: Create a Billing Rule with type Custom Line Item.

  1. Navigate to Billing Rules in the Kion portal.
  2. Select Create Billing Rule → choose Custom Line Item as the rule type.
  3. Set the timeframe for this segment.
  4. Enter a name for the Custom Line Item: this appears as the service name in spend reports and dimensions. Names are not required to be unique (see Name Uniqueness below).
  5. Enter the monthly cost amount for this segment. It's applied on the 1st of each month for the segment's duration.
  6. Assign destination Scopes, using the same auto-create-or-name behavior as Allocation.
  7. Save the rule.

Step 2: Verify in Spend Reports. Custom Line Items appear when you dimension by Service and filter by Custom Line Items as the provider. The name you assigned appears as the service name.

Custom Line Item spend won't appear for months where the destination Scope didn't yet have an active segment. A Custom Line Item starting in January but assigned to a Scope starting in June will only produce spend from June onward.

Managing Cost Changes Over Time

If a Custom Line Item's amount changes (e.g., a license renewal at a new price), add a new segment to the Billing Rule with the updated amount and start date. Historical segments keep their original values and are not retroactively updated.

Name Uniqueness

Custom Line Item names don't have to be unique; multiple Billing Rules can share a name. When viewing spend reports dimensioned by service, Custom Line Items with the same name are grouped together. Use distinct names if you need to distinguish them in reports.

Troubleshooting

A Scope fed only by Custom Line Items shows zero contributing accounts. Expected. Contributing account counts reflect cloud accounts that have contributed spend to a Scope. Custom Line Items don't originate from cloud accounts, so they don't increment that count. Custom Line Item spend still appears correctly in total cost and spend reports.

I can't delete a segment in the middle of a Billing Rule. Only the first or last segment can be deleted. Remove the segments around a middle segment first, or use Edit to change its configuration instead of deleting it.

Rate Adjustments, Markups, and Discounts

Overview

Rate Adjustments, Markups, and Discounts modify the spend Kion ingests from cloud provider billing exports. These rules apply at the billing source level, not via Scopes, and change how spend appears throughout Kion, including spend reports, savings opportunities, project spend, and more. Common uses: reseller chargeback, managed service pricing, currency normalization.

The billing source invoice tab is the only view that remains unmodified: it always reflects original billing/invoice totals from your cloud providers.

Before You Start

Requirement Details
Manage Billing Rules permission Required to create, edit, and delete rules.
Manage Billing Source permission Required in addition to Manage Billing Rules to apply a rule to one or more billing sources.
View Billing Rules permission Read-only access to rule details, for users who should see rules but not manage them.

These rules apply to all users in Kion regardless of individual permissions, since they're global modifications. Because of that, they're typically built with a specific spend type in mind (List or Billed); locking organization spend settings after configuring billing rules is recommended.

Rule Types

  • Markup: adds a percentage to ingested spend. A $10.00 charge with a 10% markup → $11.00.
  • Discount: reduces ingested spend by a percentage. A $10.00 charge with a 10% discount → $9.00.
  • Rate Adjustment: applies a multiplier to convert foreign currency spend to USD. A charge of €100.00 with a rate of 1.10633 → $110.63.

When entering a rule value, use numbers only. Percentage signs aren't accepted; the adjustment type is implied by the rule type selected.

Creating a Rule

  1. Navigate to Reporting & Financials > Billing Rules.
  2. Select Add in the top right.
  3. Enter a name and optional description. Use names specific enough to communicate scope and intent, e.g., "Reseller Markup for Azure Spend" rather than "Markup Rule." Clear names matter more as the number of rules grows.
  4. Select the billing source(s) the rule applies to. Criteria is currently limited to billing sources. For reseller scenarios, discounts typically align with billing data at the billing source (management account) level.
  5. Set the rule timeframe: start month and end month, both inclusive. Select Never Ends for no defined end date.
  6. Select the rule type (Markup, Discount, or Rate Adjustment) and enter the rule value.
  7. Confirm the rule: acknowledge the impact, check the confirmation box, and select Create. Allow up to 20 minutes for the rule to reflect across Kion.

Managing Rules

Editing a rule. Navigate to Reporting & Financials > Billing Rules, locate the rule (filter or keyword search), select Edit from the three-dot menu. You can modify name, description, billing source criteria, timeframe, and rule value. Select Update to save.

Deleting a rule. Locate the rule, select Delete from the three-dot menu, confirm. Deletion cannot be undone; spend previously modified by the rule reverts to unmodified values.

Segments

Starting in version 3.17.0, all billing rules (including Rate Adjustments/Markup/Discount) support segmented criteria updates; see Billing Rules and Segments in Shared Foundations for the general mechanics (adding, editing, overlap/gap handling).

Practical example: if a new account joins your organization in April, add it to your rule's criteria starting in April. No reprocessing is triggered for the months before it existed, limiting the financial processing impact.

To view or manage segment history for a rule, open it for editing and click the Segments link at the bottom of the form.

Notes

  • Changes to billing rules may take up to 20 minutes to reflect across Kion; for some environments the update is immediate.
  • The billing source invoice tab is never affected by billing rules; it always reflects original cloud provider billing totals.
  • Users with Manage Billing Rules but without Manage Billing Source can create rules but can't apply them to billing sources. Both permissions are required to complete setup.

Troubleshooting

My markup/discount/rate adjustment isn't reflecting in spend reports yet. Confirm at least 20 minutes have passed since the rule was created or edited (some environments update immediately). Confirm the rule's timeframe (start/end month) actually covers the reporting period you're viewing.

I have Manage Billing Rules but can't apply my rule to a billing source. You also need Manage Billing Source. Both permissions are required together to complete rule setup; Manage Billing Rules alone lets you build the rule but not attach it to a source.

The billing source invoice tab still shows the original amount after I applied a rule. Expected: the invoice tab is intentionally never modified by billing rules and always reflects the original cloud provider invoice.

I deleted a rule and now spend looks different than before I created it. Also expected: deletion is not reversible, and spend previously modified by the rule reverts to its unmodified value going forward.

Administrative Notes

Historical processing. If a Billing Rule is created with a historical start date, Kion processes historical months and populates costs retroactively. Processing time scales with the number of months and accounts involved.

Contributing account tracking. The Scope Details page tracks contributing accounts historically: it includes every account that has ever fed a Scope, not only accounts actively contributing in the current month. This is expected behavior. (Custom Line Items never increment this count; see Custom Line Items Troubleshooting above.)

Sizing and performance. When initially setting up an Allocation rule or Custom Line Item, Kion needs to process all historical months the rule should impact. Processing runs per account, per month. Based on internal benchmarking at approximately $1M in monthly spend on an r5.2xlarge EC2 deployment, expect roughly 20 minutes of processing time per account per month. This scales mostly linearly, so environments targeting more accounts take proportionally longer. Larger infrastructure reduces this baseline, and each customer's dataset can vary in size and timing. The same account belonging to multiple rules does not materially impact timing.