By default, when you create a standalone AWS account, you must provide a payment method (for instance, a credit card). For large organizations, it usually doesn’t make sense for them to receive as many bills as they have AWS accounts. They usually demand a consolidated bill across all the accounts in their AWS environment. Consolidated billing is a feature that was introduced with AWS Organizations. It allows you to designate one account (the management account) as the payer account for all the member accounts in your organization. The bill in this case is centralized by default. You can not only easily track what each account in your organization spends but also combine the usage from all your accounts and share the various discounts you may be entitled to (volume pricing discounts, Reserved Instances discounts, Savings Plans discounts) across all your accounts. This usually results in lower charges for your organization as opposed to the charges for consumption on individual accounts.
There may also be cases where large organizations want to have separate bills—for instance, a multinational corporation composed of several separate companies (or legal entities) may prefer to have their bills consolidated on a company (or legal entity) basis. In such cases, you could do two things. You could set up separate organizations by company (or legal entity) so that you automatically get the centralized bill exactly as needed. Alternatively, you could keep a single organization but split the single centralized bill into separate bills per company (or legal entity), filtering by the list of accounts that belong to each company (or legal entity). AWS indeed creates a separate bill for each account, according to the usage of that account. When choosing the first option (separate organizations), you automatically end up with multiple payer accounts (one per organization) while, in the second case, you still have a single payer account paying the bill for the entire organization but can easily charge back individual companies (or legal entities).
The following section will take you through how to determine billing strategies based on your requirements.
As was detailed in the previous section, centralized billing brings a lot of benefits, and for most organizations, it is a given. That said, there are a number of best practices to consider when building your account structure and formulating a billing strategy.
First, avoid using an individual’s email address as the account email address to ensure continuity of communication from AWS. Instead, use a group alias for a functional mailbox. Individual email addresses can lead to issues related to the availability of the individual as well as business continuity for the enterprise. Suppose the individual leaves the company. The process of regaining root access to the account associated with that individual can be painstaking for the enterprise. Therefore, it is better to use a group alias as an account email address and for all the email notifications configured on your accounts.
Second, tag your AWS resources following standards across all your accounts to standardize how your enterprise categorizes, controls access to, and reports on these resources. Leverage cost allocation tags, which can be used with AWS Cost Explorer and Cost and Usage Report (CUR) data. You can define a number of tags (for instance, cost center, department, or project) to be used as cost allocation tags. You can then filter billing data along with those tags for chargeback, reporting, or analysis purposes. Refer to the AWS Tagging Best Practices whitepaper for additional guidance (see the Further Reading section).
Third, use consolidated billing to make AWS cost management easier.
Consolidated billing is one of the key features provided by AWS Organizations. When you set up an organization in AWS Organizations (see the next section), the management account automatically centralizes the bill and pays the charges for all the organization member accounts. Consolidated billing is most suitable when you have to handle billing for a large number of accounts (ranging from tens to hundreds—or even thousands—of accounts). It offers a centralized bill for all the accounts belonging to the same organization. So, unless you have particularly good reasons to do this differently, do leverage consolidated billing and, if needed, use cost allocation tags to be able to return the charges back internally to the various teams, departments, or BUs within your organization, as you see fit.
The following section discusses AWS Organizations and how it can help with account management in depth.
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