Skip to content

Azure Costs & Billing

CAF best practices treat cost as a governance pillar where subscriptions and tags define financial boundaries, policies enforce discipline, and dashboards provide visibility. This ensures cloud adoption is not only secure and scalable, but also financially sustainable.

image

Tenant-Level Billing Foundation

  • Enterprise Agreement (EA) / MCA / CSP: Billing is anchored at the tenant level, not inside any subscription.
  • Billing Profiles: Define how invoices are generated and who pays them.
  • Cost Visibility: All subscriptions roll up into the billing account, enabling consolidated reporting.

Caf

Establish billing profiles and cost centers before creating 
subscriptions, so financial governance is baked in from day one.

Subscription Strategy & Cost Segmentation

  • Subscriptions = Cost Boundaries: Each subscription has its own invoice line items, making it a natural unit for cost tracking.
  • Segmentation: Align subscriptions with business units, environments (dev/test/prod), or workload categories.
  • Budgets & Alerts: Apply budgets at the subscription level to prevent overruns.

Caf

Use subscriptions as financial guardrails—not just technical boundaries.

Tagging & Resource Organization

  • Tags: Apply CostCenter, Owner, Environment, and Application tags to all resources.
  • Policy Enforcement: Use Azure Policy to require tags at deployment.
  • Roll-Up Reporting: Tags flow into Cost Management + Billing for granular reporting.

Caf

Treat tagging as non-negotiable. Without it, cost allocation becomes guesswork.

Cost Management & Optimization

  • Azure Cost Management + Power BI: Provides dashboards for spend analysis.
  • Budgets & Alerts: Trigger notifications when spend approaches thresholds.
  • Reserved Instances & Savings Plans: Optimize predictable workloads.
  • Rightsizing & Auto-Shutdown: Reduce waste in dev/test environments.

Caf

Embed cost optimization into DevOps pipelines—shift-left cost awareness.

Shared Services & Platform Costs

  • Platform Landing Zone Costs: Shared services (e.g., networking hubs, firewalls, monitoring) live in platform subscriptions.
  • Chargeback/Showback: Allocate shared costs back to business units using tags or Resource Graph queries.
  • Transparency: Make platform costs visible so app teams understand the “tax” of shared services.

Caf

Document and communicate shared service costs clearly—avoid “black box” billing.

Governance & Accountability

  • Management Groups: Apply cost policies (e.g., allowed SKUs, regions) at the MG level.
  • Policy Guardrails: Deny expensive SKUs or enforce cost-saving defaults.
  • FinOps Integration: Treat cost governance as part of your cloud operating model, not an afterthought.

Caf

Align cost governance with FinOps principles—visibility, 
accountability, and continuous optimization.