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We have all had clients that call and want us to start servicing their property mid month. Depending on the duration of your contracts and the part of the country you live in, this can cause an issue with Invoicing. Contracts can only invoice for 12 months. If you start a contract on April 15, you cannot end the contract on April 14 the following year. That would cover 13 months of invoicing. 

 

Here are some solutions to this issue. Also, please share how your company handles this scenario. 

 

Creating a contract or work order for the initial partial month. 

 

When starting a new contract in the middle of a Month, many people choose to create a work order or a small one-month contract, with only the services needed for that partial month. After that initial month, you would start an actual 12-month contract opportunity and the start and end dates of that contract would be your rolling 12 months going forward. 

 

Example: A new client wants to start service on May 15. You would create a contract that only contains the services for May. This could be with a fixed monthly price or done on a per-service basis. Then you would create a full 12-month contract that starts June 1 and runs through May 31. 

 

Starting the contract mid-month and cutting it short by a half month. 

 

Another option would be to start your contract in the middle of a month, but cut the end of the contract short. You would want to verify you only have the correct services and service occurrences for that length of contract. 

 

One factor to consider in this approach is the process of Invoicing. How will you invoice for that first partial month? Make sure to set up your payment schedule correctly to spread the dollars as desired. 

 

Example: Start a contract on April 14, you can run it through March 31 the following year and not have any issues with invoicing. After that, your future contracts will start on April 1. It's important to ensure that you update services and quantities on the renewal if you have removed some from the initial contract. 

 

Starting the contract mid-month and ending the contract in a month of your choosing. 

 

You may not have full 12-month contracts, or you may have a specific time of year that you prefer to do your renewals. You can always start a contract mid-month and then end it in any month of your choosing, as long as it is less than 12 months. 


Example: If you are signing a new customer on June 15. You want all renewals to start on January 1. You would date your contract from June 15 to December 31. Only include services that will occur during that time period to ensure your monthly billing is correct. Then create a new contract starting on January 1 that will contain a full year's worth of services.

Thank you so much for this detailed information.

 

I have a quick question.

how about keep the start date as 05/15/2024 and end date as 05/14/2025, but change the payment schedule for May as half of monthly payment?

 

What is the downside of this method, please?

 

Thank you so much for this detailed information.

 

I have a quick question.

how about keep the start date as 05/15/2024 and end date as 05/14/2025, but change the payment schedule for May as half of monthly payment?

 

What is the downside of this method, please?

 

The problem you would have is that you cannot invoice the second May because Aspire would only show May - April available for an invoicing amount in the payment schedule. 

 

Best practice is to always start a contract on the 1st of the month and end on the last of a month, no more than 12 months. 

Hi Ryan,

It actually will be shown on the invoicing assistant for next year and system will allow for the 13th invoice.

 

We had a contract last year started on the mid of month, 05/15/2023 to 05/14/2024.  So we spread the 12 month payment on the payment schedule.

Then it shows again this year on the invoicing assistant for May. Our administrator generated a 13th invoice, then we credited memo to the client.

 

so this solution come across my mind, if we set May amount to be half of the monthly amount. The system will allow to invoice May 2023 for the half month and it will allow me to invoice May 2024 with the rest half.

 

But I’m not sure what is the downside of this way. Thank you!

 

We understand that the best way is to start at 1st day of month. We also want to better understand the system.

 

Thank you!

 

 

Hi Ryan,

It actually will be shown on the invoicing assistant for next year and system will allow for the 13th invoice.

 

We had a contract last year started on the mid of month, 05/15/2023 to 05/14/2024.  So we spread the 12 month payment on the payment schedule.

Then it shows again this year on the invoicing assistant for May. Our administrator generated a 13th invoice, then we credited memo to the client.

 

so this solution come across my mind, if we set May amount to be half of the monthly amount. The system will allow to invoice May 2023 for the half month and it will allow me to invoice May 2024 with the rest half.

 

But I’m not sure what is the downside of this way. Thank you!

 

We understand that the best way is to start at 1st day of month. We also want to better understand the system.

 

Thank you!

 

 

Interesting. I just tested this and you are correct, It will print the 13 month invoice. 

 

Here are a couple issues with that scenario. 

  1. If you put full months invoicing on all months, you now have that 13 month invoice that you need to credit off. You also will be generating an invoice on the new opportunity on the 15th. This seems like it is adding a lot of room for error and needing to remember to credit off the last invoice. You also would not have the ability to invoice on the first of the month for your renewal opportunity, which could cause issues if you invoice all your monthlies on the first of the month. 
  2. If you put a half month payment in the first month, it will generate a half month payment in the 13th invoice. I'm not sure it makes sense to invoice 2 invoices in the month that a contract ends every year. Another issue you will run into is the payment schedule will not be able to match that. It can only show 12 months on a contract. 

Because of both of these reasons, we consider it best practice to reset the dates of your contract to the first and last of months at some point. No matter how you use aspire, the point is to set it up so that all practices are repeatable and scalable and you don't have a lot of work arounds and special scenarios to remember. This post was meant to give you some ideas on how to handle those new mid month contracts and make it as easy as possible long term.

Thank you for testing it.

Yes.I can’t agree more to start the contract on the first day of month is the best practice.

I really appreciate that you posted this topic.

 

 

Why couldn’t you just set start date for the first of the month that services start, and then send them an invoice due immediately as soon as the contract is won. Requires sales reps to communicate that they will see an invoice for that first month. 

We end all contracts on December 31 and start new ones January 1 (or March 1 depending on the service times we need to cover - we’re in Wisconsin so very little contract work happens over the winter). 

In situations where we’re starting a new maintenance contract mid-month, we often try to start the client out as a T&M invoice type. Our client base is high-end residential, so it makes sense to do T&M to get started anyway - that allows us to make up for inadequate service that happened before we take over and get the property on a better path. That obviously doesn’t work for a lot of commercial or mid-range residential clients, so in those cases we may choose to do a partial month billing or just spread that partial month onto the rest of the months. We don’t encounter this often enough to have many concerns, though. 

Hi Ryan,

It actually will be shown on the invoicing assistant for next year and system will allow for the 13th invoice.

 

We had a contract last year started on the mid of month, 05/15/2023 to 05/14/2024.  So we spread the 12 month payment on the payment schedule.

Then it shows again this year on the invoicing assistant for May. Our administrator generated a 13th invoice, then we credited memo to the client.

 

so this solution come across my mind, if we set May amount to be half of the monthly amount. The system will allow to invoice May 2023 for the half month and it will allow me to invoice May 2024 with the rest half.

 

But I’m not sure what is the downside of this way. Thank you!

 

We understand that the best way is to start at 1st day of month. We also want to better understand the system.

 

Thank you!

 

 

Interesting. I just tested this and you are correct, It will print the 13 month invoice. 

 

Here are a couple issues with that scenario. 

  1. If you put full months invoicing on all months, you now have that 13 month invoice that you need to credit off. You also will be generating an invoice on the new opportunity on the 15th. This seems like it is adding a lot of room for error and needing to remember to credit off the last invoice. You also would not have the ability to invoice on the first of the month for your renewal opportunity, which could cause issues if you invoice all your monthlies on the first of the month. 
  2. If you put a half month payment in the first month, it will generate a half month payment in the 13th invoice. I'm not sure it makes sense to invoice 2 invoices in the month that a contract ends every year. Another issue you will run into is the payment schedule will not be able to match that. It can only show 12 months on a contract. 

Because of both of these reasons, we consider it best practice to reset the dates of your contract to the first and last of months at some point. No matter how you use aspire, the point is to set it up so that all practices are repeatable and scalable and you don't have a lot of work arounds and special scenarios to remember. This post was meant to give you some ideas on how to handle those new mid month contracts and make it as easy as possible long term.

Another problem with this scenario is that you will have a revenue variance since credit memos do not affect over/under and revenue variance.  

Great topic, Ryan!

We use the Work Orders method, similar to how you describe, and works well for us. It requires limited time to set it up and reduces invoicing errors (in the beginning and end of the contract), as well as tracking contract renewals, compared to the mid month start.

It is explained in detail to the client in the beginning, of course.  Many clients will do a beginning of month start if asked.  For those that cannot wait, a work order for each additional mow works for our clients.  Building a contract for a month has been less efficient for us. 

The drawbacks we have worked through is when evaluating the sale, for purposes of commission, since we commission differently for contract and Work Orders.  But these are usually one off cases and we’ve learned not to devote an overly elaborate solution. (K.I.S.S. rule). We don’t build a rule specifically for this so just commission the Work Orders as usual.

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