What underbilling means here
In this guide, underbilling means an invoice falls short of what a contract allows. (In construction accounting, "underbillings" also describes costs earned but not yet billed on a project — a related but separate idea.)
Signs a customer may be underbilled
- The monthly amount hasn't changed in years despite an increase clause.
- The customer has grown — more users, sites or volume — but the invoice hasn't.
- Invoices fall below a minimum monthly fee in the contract.
- Agreed fees (setup, support, extra services) never appear on invoices.
- A first-year discount is still being applied.
Step by step
- Pick a starting group — for example your 20 largest recurring customers.
- Read each contract and note every term that affects price, with the exact clause.
- Verify each term with a second person. Don't assume an increase applies unless the wording says so.
- Line up invoices for the same period.
- Calculate the gap: allowed amount minus invoiced amount, per month.
- Sort by size so the largest potential gaps get reviewed first.
- Review and decide with account owners how — and whether — to apply each term.
A quick example
A contract includes 50 users at $40 each and charges $35 for each extra user. The customer now has 62 users, but invoices still show 50 × $40 = $2,000. The potential gap is 12 × $35 = $420/month, about $5,040 a year.
Keep it from recurring
Re-check whenever a contract renews, usage changes or a discount end date passes, and keep notes on what was found and decided.