A leaver, and a calculation
A customer serves notice to leave. They have hosted seats added in three batches over two years, broadband at two sites, a leased line on a longer term, and a handful of mobiles with subsidised handsets. Some of it signed under your old terms, some under the new ones. Their new provider has told them the switch will be painless.
Your finance manager opens the contract folder, the billing platform and a calculator. For each service they work out the months remaining, what the terms say is payable, and whether any handset subsidy is recoverable. It takes most of a morning. The customer replies disputing it, saying their account manager told them the seats were all on the same term.
The same calculation is being done again, from scratch, for another leaver next week.
Why the numbers are hard to get right
- Each service has its own start date and term, and add-ons may or may not be co-terminous.
- Different versions of your terms say different things about what is payable on early exit.
- Handset subsidies, install charges waived at sale and discounts may be recoverable under some agreements and not others.
- The customer's memory of what was agreed (and what the salesperson said) differs from the paperwork.
- Supplier costs for the remaining term sit behind the calculation too, and may be larger than what you can charge.
What the customer owes is decided by the contract they signed. The work is in reading it consistently and showing the working.
What getting it wrong costs
| Mistake | Effect |
|---|---|
| Charge too low | You carry supplier cost for the remaining term |
| Charge too high | Dispute, complaint, possible refund |
| No clear breakdown | Customer refuses to pay, debt goes stale |
| Different staff, different methods | Inconsistent charges between customers |
| Slow calculation | Charge raised after the customer has moved on |
Whether and how much you charge on early exit is your commercial decision within your terms. We make sure that when you decide, the figures are right and explainable.
The ETC calculator we build
- Each service record holds its start date, term, the version of terms it was sold under, and any subsidy or waived charge recorded at sale.
- The rules from each version of your terms are set up once, as your team reads them: what is payable for remaining months, what is recoverable, and any caps.
- When notice or a port-out arrives, the calculator produces a draft charge per service, and the total, with the rule it used for each line.
- The supplier side is shown alongside: what you will still owe your suppliers for each service after the customer leaves.
- A plain breakdown document is generated for the customer, service by service, with the start date, term and months remaining shown.
- Your finance manager reviews and can adjust any line, with a note, before anything is sent. Any waiver is recorded with the reason.
What your team sees
A leaver's charge is a review, not a research project. The breakdown answers most of the customer's questions before they ask them, because it shows each service's dates and the rule applied. Where a line is disputed, you can see exactly why the figure is what it is.
It also removes the dependence on one person. The finance manager who knew how the old terms worked can go on holiday, and a leaver's charge still comes out the same way, with the same working shown.
You also get a view you did not have before: for any customer, at any time, what their exit would cost them and what it would leave you owing suppliers. That is useful at renewal, and before you agree to let a customer out early as a goodwill gesture.
Recognise this?
- Early termination charges take hours to work out.
- Different people calculate them differently.
- Customers dispute charges because they cannot see how they were worked out.
- You are not sure which version of your terms each customer signed.
- Supplier costs for the remaining term are forgotten until the invoice arrives.