Invoicing installation and a first part-month
How an internet provider invoices a new connection's installation and the part-month of service before the first full month, and asks for payment first.
By Achekam · · 4 min read · For Telecoms businesses in South Africa, Nigeria, Kenya
A new fibre subscriber signs up in the middle of the month. The installer fits the router a few days later, the line goes live the same afternoon, and your monthly invoices go out at the start of each month. So what goes on the subscriber's first invoice? The installation fee, certainly. But what about the days of service between going live and the end of the month?
Providers handle this in different ways, and subscribers notice when it is handled badly: a full month charged for a week of service, or a part-month that appears on the second invoice with no explanation. This article sets out a clear approach for the first invoice, and how it runs in Achekam today.
Once-off and monthly charges on one invoice
A new connection usually brings two kinds of charge:
- Once-off charges: installation, activation, a call-out, sometimes a router if it is sold rather than lent.
- Recurring service: the monthly fee for the line and any add-ons such as a static IP.
Putting both on the first invoice, as separate lines, is clearer for the subscriber than two invoices arriving days apart. Each line should say what it is for and the period it covers, so "Monthly service, part-month from going live to month end" rather than just "Fibre".
Working out the part-month
The usual method, which your terms should state, is to charge the monthly fee in proportion to the days of service in the first month: the monthly fee multiplied by the days from activation to month end, divided by the days in that month. Decide in your terms:
- Which date starts the clock: the installation date or the date the line is live. Live is fairer and causes fewer complaints.
- Whether the activation day counts. Pick a rule and apply it every time.
- Rounding: to the cent, or to a whole unit of currency, consistently.
Some providers skip the part-month entirely and start billing on the first of the next month; others bill the part-month together with the first full month on one invoice. Both are fine if your terms say so. What causes disputes is inconsistency between subscribers.
Lines, VAT and the invoice date
In Achekam, you create the invoice as a draft, which you can change or delete, and issue it when it is right. Issuing takes the next number in your sequence and posts the invoice to the ledger as debtors, sales and output VAT. Default terms are 30 days, and the number format is set in Settings.
VAT is set per line. A South African business sets each line to 15% or 0%. A Nigerian or Kenyan business picks a tax code on each line, standard, zero-rated, exempt, out of scope or reverse charge, and only standard lines carry VAT, at the approved rate for its country. When a line states no rate, VAT is taken at the rate in force on the invoice date, so date the invoice on the day you actually issue it, not on the installation date if those differ.
What a valid tax invoice must show is set by each country's tax authority. In South Africa, SARS sets out a vendor's duties, including charging VAT, quoting VAT-inclusive prices and issuing tax invoices, on its page on the obligations of a VAT vendor.
Where both kinds of income post today
At the time of writing, all invoice revenue posts to one account, Professional Services Revenue (4100), and a line cannot name another sales account. Installation fees and monthly service therefore land in the same revenue account.
For a provider that wants to report recurring revenue separately from once-off installation income, that matters. Until invoice lines can name their own revenue accounts, keep the split another way: a monthly journal, agreed with your accountant, that moves installation income into its own account, using a list of the month's installation invoices. Keep the list with the journal so the split can be checked.
Asking for payment before the installer goes out
Installation costs you an installer's time, a router and sometimes a third-party order with the network operator. Many providers ask for the installation fee before booking the installer, so a subscriber who changes their mind does not leave you with the cost.
Pro-forma invoices are not offered in Achekam, and a payment link cannot be created for a draft invoice: only for an issued one. So the order of events is:
- Issue an invoice for the installation and activation as soon as the order is accepted.
- E-mail it with a pay link. An issued invoice can be downloaded as a PDF on your letterhead and e-mailed with or without a link, and a failed send is reported as not sent.
- Book the installer once the payment shows as received.
- After the line is live, issue a second invoice for the part-month, or include it on the first monthly invoice, as your terms say.
If the subscriber pays only part of the installation invoice, the payment leaves it part-paid, with the balance still owed. Hold the booking until it is cleared. How online subscriber payments reach the books explains what happens in the ledger when a pay-link payment arrives.
Whether a router fitted at installation is sold, rented or lent changes the invoice as well; routers lent to subscribers covers that decision, and monthly invoices for subscribers picks up from the first full month.
The next new connection
Write your part-month rule into your terms and onto a one-line note for the billing team. Then issue the next installation invoice before the installer's slot is booked, and the first invoice will no longer be the one your subscribers query.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
