AWS Consolidated Billing

AWS Consolidated Billing is a feature of AWS Organizations that simplifies cloud cost management for businesses with multiple AWS accounts. By consolidating bills under a single account, organizations can achieve better cost tracking, optimization, and discounts. In this guide by The Coding College, we’ll dive into how AWS Consolidated Billing works, its benefits, and best practices.

What is AWS Consolidated Billing?

AWS Consolidated Billing is a free feature provided through AWS Organizations that allows multiple AWS accounts to be grouped into a single billing entity. A designated management account pays the total cost for all linked accounts, while maintaining account-specific visibility into usage and costs.

Key Features

1. Centralized Billing
   • Combines all account charges into one invoice.
   • Simplifies payment and financial management.
2. Cost Tracking by Account
   • Breaks down costs per account, enabling granular tracking.
3. Shared Discounts
   • Aggregates usage across accounts to qualify for volume-based discounts.
4. Linked Account Independence
   • Maintains separate access, permissions, and resources for each account.

Benefits of AWS Consolidated Billing

1. Simplified Financial Management
   • Reduces administrative overhead by consolidating payments into one bill.
2. Cost Savings
   • Maximizes discounts for services like Amazon EC2, S3, and Data Transfer by pooling usage.
3. Enhanced Cost Visibility
   • Provides detailed usage reports for each linked account.
4. Flexibility for Teams
   • Teams can operate independently while benefiting from centralized billing.
5. Compliance and Auditing
   • Detailed cost reports ensure accountability and support compliance requirements.

How AWS Consolidated Billing Works

1. Create an AWS Organization

• Navigate to the AWS Management Console.
• Create an organization and designate a management account.

2. Invite Member Accounts

• Add existing AWS accounts or create new ones under the organization.

3. Enable Consolidated Billing

• Once accounts are linked, billing is automatically consolidated.

4. Access Billing Data

• Use the AWS Billing Dashboard and Cost Explorer to view costs by account, service, or region.

Real-World Example

A company with separate AWS accounts for Development, Testing, and Production links them under Consolidated Billing. By pooling EC2 usage, the company qualifies for higher-tier Reserved Instance discounts, saving 20% annually.

Best Practices

1. Set Budgets for Linked Accounts
   • Use AWS Budgets to define spending limits and receive alerts.
2. Enable Cost Allocation Tags
   • Categorize costs by projects or departments for detailed tracking.
3. Monitor Usage with Cost Explorer
   • Analyze spending trends and identify optimization opportunities.
4. Leverage Volume Discounts
   • Use shared resources like data transfer and storage to achieve cost savings.
5. Separate Critical Environments
   • Keep critical workloads like production in separate accounts for isolation and security.

Common Use Cases

1. Multi-Department Organizations
   • Centralize billing for IT, HR, and Finance departments with separate AWS accounts.
2. Startups with Multiple Teams
   • Provide individual teams with independent accounts while managing a single bill.
3. Global Enterprises
   • Optimize regional AWS accounts for better cost control and discounts.

Conclusion

AWS Consolidated Billing is an essential tool for organizations looking to simplify billing and reduce costs. By centralizing payments and leveraging discounts, you can improve financial management while retaining operational independence across accounts.