Review recurring invoices before they go out

Recurring invoices feel automatic, which is exactly why they drift. The agreement in your PSA was right when someone set it up. Since then a client added a site, a discount ran out, a tax rule changed, or a contract was amended by email and never keyed in. The invoice run happily repeats whatever it was told last month.

A pre-invoice review is a short, scheduled look at the batch before it is sent. It is not a full audit. The goal is to catch the handful of errors that cost you money or credibility while they are still drafts, because fixing a draft takes a minute and fixing a sent invoice takes a credit memo, a reissue and an awkward email.

What to check, in order

Run through the same list every cycle so nothing depends on memory.

1. Agreement changes. Pull the list of agreements that were added, amended or cancelled since the last run. Each one should show up in the batch with the new terms, or be missing from it if it ended. Cancellations that still bill are the fastest way to lose a client's trust.
2. Additions and removals. Compare billed quantities (users, devices, sites) against the latest counts you have. New onboardings are the usual gap: the work started, the agreement did not.
3. Expired discounts and price changes. Introductory pricing and one-time concessions should have an end date. Look for any discount line whose term has passed, and confirm that any announced price increase actually took effect.
4. Sales tax. Check that each client's tax setting matches where the service is delivered and how your state treats that type of service. A new client in a different state, or a new line item type, is where tax errors tend to start.
5. Duplicates and oddities. Sort the batch by client and by amount. Two invoices for the same client and period, a zero-dollar invoice, or an amount far off last month's are all worth a look.
6. Totals against last cycle. Compare the batch total to the prior run. If the difference is not explained by the changes you already reviewed, find out why before sending.

The last step is the safety net. If you know you added two clients and lost one, the batch total should move by roughly those amounts and no more.

A worked example

The numbers here are illustrative. Say an MSP sends 60 recurring invoices totaling $90,000 at the start of each month. During review, the bookkeeper finds three problems:

• A client onboarded 10 additional users at $150 per user, but the agreement still shows the old count. That is $1,500 not billed.
• A 10% introductory discount on a $5,000 agreement expired last month and is still applied. That is $500 not billed.
• One client has two invoices for the same month, each for $2,000, because an agreement was copied during an amendment instead of edited.

After fixes, the batch picks up $2,000 of revenue it would have missed ($1,500 plus $500) and drops one $2,000 duplicate. The corrected total is $90,000 + $2,000 − $2,000 = $90,000. The total happens to land in the same place, which is the point worth noticing: a batch-total comparison alone would have looked fine. That is why the line-level checks come first and the total check comes last.

Who owns it

The review needs one named owner and one backup. In most small MSPs that is the bookkeeper or controller, because they see the invoices, the payments and the client disputes. Operations or the service manager should supply the inputs: the list of agreement changes, new onboardings and offboardings since the last run.

A simple split that works:

• Service or account management sends a change list a few days before the invoice run, or confirms there were no changes.
• Finance reviews the batch against that list and the checks above, fixes drafts, and records what was changed.
• The owner approves anything unusual, such as a new discount or a one-time credit, rather than every invoice.

Keep a short log of each cycle: date, batch total, number of invoices, what was corrected and why. After a few months, the log shows patterns. If most fixes are missed onboardings, the real fix is upstream, in how new clients are handed from sales to service to billing.

Making it stick

Put the review on the calendar a set number of days before the invoice date, and do not send the batch until it is marked complete. If you bill in advance, give yourself enough lead time that a question to the service team can be answered before the due date.

Treat any error that reaches a client as a reason to add or sharpen a checklist line, not as a one-off. The list should get more specific over time, not longer for its own sake.

This is general information about billing operations, not accounting or tax advice. Sales tax treatment of IT services varies by state and by how a service is delivered, so adapt this checklist with your accountant to fit your agreements and the states where you operate.