Worked scenario
Licences renewed, hosting continued, invoice never raised
Recurring revenue is the most valuable part of an IT business and the easiest to lose, because nothing happens when an invoice is not raised.
3 min read
A project includes licences and hosting. They are provisioned, billed once, and continue. The supplier charges monthly. Whether the client is billed monthly depends on whether someone set it up.
Failure is silent in both directions
An unbilled renewal produces no complaint from the client and no alert from the system. The business simply pays a supplier cost against no revenue, sometimes for years.
Cost and price together
Where supplier cost lives in accounts and client price lives in the sales record, margin on recurring items is not visible anywhere. Supplier price rises then erode it silently.
The audit worth doing once
Listing every recurring supplier charge and matching it to a client billing line. Most IT businesses that do this find at least one item they have been funding, and it usually pays for the exercise several times over.
What changes
- Every recurring item recorded with its renewal date and margin
- Renewals raised from the record rather than from a reminder email
- Supplier cost and client price tracked together
- Items still being paid for but no longer billed identified
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