SaaS
Enterprise deals combine subscriptions, implementation fees and usage charges, each with different revenue rules.
Finance for SaaSAccounting & Financial Reporting
Contract billing reconciliation: when contracts, invoices and revenue don't match
The contract says one thing, the invoices another, and revenue in the accounts a third. Somewhere in between, money is either missing or being recorded wrongly.
When contracts and billing drift apart
Amendments that never reach invoicing. Change requests approved informally. Milestones delivered but not billed. Over time, underbilling and incorrect revenue build up quietly.
- Invoice amounts or dates that differ from contracts
- Completed work not yet invoiced or recorded
- Informal change requests that never get billed
- Mixed fixed-fee, hourly and milestone contracts
How contract-to-billing reconciliation works
Every contract should be traceable to its invoices and to the revenue in the accounts.
- 1
Reconcile the history
Compare contracts, invoices and project records to find underbilling and revenue errors.
- 2
Record unbilled work
Recognize work delivered but not yet invoiced as unbilled revenue, so the accounts reflect reality.
- 3
Close the change request gap
A simple process so approved extra scope always reaches invoicing.
- 4
Monthly check
A recurring reconciliation of contract terms, billing and revenue.
Contract and billing problems in tech companies
MSPs
License counts in Pax8 or Microsoft, agreement quantities in ConnectWise and invoices drift apart. A monthly true-up stops the leakage.
Finance for MSPsIT services & agencies
Milestone and fixed-fee work needs unbilled and deferred revenue tracked so revenue follows delivery.
Finance for IT services & agenciesFrequently asked questions
Should completed but uninvoiced work appear in the accounts?
Yes, as unbilled or accrued revenue, if it has been delivered and you're entitled to bill it.
How do we systematically check contracts against invoices?
List contract terms per customer, compare against invoices by amount and date, and investigate every difference.
Can an accountant reconstruct old contract billing?
Yes. Reconciling past contracts, invoices and project records shows what was underbilled and where revenue was wrong.
Is there software to enforce contract billing?
Billing and PSA tools can automate renewals, milestones and usage, but the setup needs checking against the contracts.
How should MSPs reconcile licenses and invoices?
Compare license counts from the distributor, agreement quantities in the PSA and invoiced amounts every month.
How do we stop approved change requests from being lost?
Log every approved change in one place that finance reviews before invoicing.
What kind of accountant handles mixed contract types?
One familiar with project and contract accounting: fixed-fee, hourly, milestone, unbilled and deferred revenue.
Your company has enough moving parts already.
Start with a clear look at where things stand and what should improve.