The monthly billing cycle

Why the variable leg lags

Three of the measures that decide the slabs cannot be computed until the month has closed. Document pack completion within turnaround needs the last day's packs to age out. QA sampling needs a closed population to sample from. Investor CSAT is collected by Akontec at stage changes and swept at month end. Paying the variable leg on the fifteenth would mean paying on estimates and reconciling later, which is worse for both sides than a clean six-week lag.

The practical effect on your cash flow is one cycle of variable income sitting in the pipeline at any time. From month three onward you receive a variable payment every month — it is simply the one earned six weeks earlier.

The first cycle

Billing starts on the go-live certification date, not on the signing date. Your first invoice covers the part-month from go-live to month end and is raised on the normal working-day-three schedule of the following month. If go-live falls on the 25th, the first invoice covers six days.

If a line is disputed

Akontec must raise it in writing by working day seven with the specific line and the reason. The undisputed portion of the invoice is paid on the normal date — a single contested seat never holds up the whole payment. The disputed line is settled in the following cycle once the underlying data is reconciled, with interest if the dispute is decided in your favour.

If payment is late

Interest accrues at 1% per month on any amount outstanding beyond ten days of the due date, without the need for a demand. If a payment is more than thirty days late you may suspend the desk on seven days' written notice without breaching the agreement, and the lock-in is treated as satisfied for that period.

The quality retention

5% of each fixed payment is held and released in full at the end of every quarter, provided no service measure has sat below its floor for two consecutive cycles in that quarter. Over a full term it is a timing item, not a deduction. On a 20-seat desk it is roughly ₹1.28 lakh in the pipeline at any time.

The heaviest cash month is the first one. You will have hired and trained twenty-five people, paid at least one full payroll, and taken delivery of systems and connectivity before a single rupee has been invoiced. Schedule E budgets ₹6,50,000 for this, and that figure assumes go-live lands on schedule at day 25. It is the line most partners under-budget.

From the second cycle the position improves sharply. The fixed leg arrives on the fifteenth, ahead of most Indian payroll dates, so from month two your payroll is funded by the current month's own billing rather than by your reserves. From month three the variable leg starts arriving as well, and the desk is self-funding.

The one thing worth planning for is the retention. It builds over the first quarter and only releases at the end of it, so treat roughly ₹1.3 lakh as locked capital for the first ninety days.