A telecom and managed-IT business gets paid before it delivers, and delivers before it bills — two timing mismatches most other businesses don't have to reconcile. Here's how Zambezi Netlink ICT Services handles it.
An internet service provider collects a subscription up front, for service delivered over the following month. A managed-IT provider often does the opposite — delivering support through the month, then billing for usage afterwards. Zambezi Netlink ICT Services Ltd, one of our eighteen fictional reference companies, runs both businesses at once, and carries both timing mismatches on its books.
Where the complexity actually is
Deferred subscription revenue — money already received for service not yet delivered — sits alongside unbilled usage, the mirror case of service already delivered but not yet invoiced. Its IP-transit and customer equipment suppliers are dollar-denominated, and its withholding tax position includes the 20% rate that applies specifically to a non-resident service provider, a detail easy to miss if you're used to domestic-only withholding tax. Network and tower registers, and stock covering customer equipment, fibre and resale lines, round out a business built on both infrastructure and service.
Fully onboarded, and transacting
Zambezi Netlink went through the same review and sign-off workflow described in our opening balances post, and has carried on since: a real quotation, order, invoice and payment on the selling side, a real purchase order, supplier bill and payment on the buying side, and — because its IP-transit and equipment suppliers are dollar-denominated — a month-end exchange rate revaluation on that creditor balance.
Get in touch if telecom or managed-IT accounting is closer to your own business than a standard trading company.
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