Charging and rating are two of the most important aspects of an online charging system. Below is a description for both with relevance to telecom billing:

Charging

Nowadays, companies utilize an OCS system for charging subscribers depending on their use of services. Charging is done on the basis of CDRs (Call Data Records), which are generated whenever a customer interacts with the telcos network and uses services. The OCS serves as a single system for charging and has three basic functions:

1. Event-based charging function: Event based charging is applied to services such as SMS. It means that customer is charged for the number of SMS he sends in a particular billing cycle.

2. Session-based charging function: Session based charging is applied to services such as voice calls. Depending on the duration of a call, the customer is charged accordingly. It means the longer the call, higher is the charge applied.

3. Account and balance management function: This function keeps customers’ balance information. Depending on the charges incurred, the balance is deducted accordingly.

Charging is a flexible process and allows for waiving of charges during certain special scenarios. For example, in case of a discount, the charges are reduced by the OCS by applying the necessary discounts.

Rating

Rating in telecom is the process of converting metered data into an invoice. Rating completely depends upon the pricing plan of a telecom network operator.

After the services are charged in the OCS, the rating engine applies the necessary rates to services used. For example, if a customer makes a 5 minute call to Japan and the rate per minute is $1, then he has to pay $5 for the call. A similar call made to the US with a rate per minute of $2 will be rated at $10.

Unlike charging, which can be flexible, rating is a fixed process. It is always done on the basis of unique tariff plans that are launched by telecom operators.

For more detail you can go through this link Online charging system - Wikipedia