Prepaid vs postpaid: what’s the difference for a business?

How each one works

Prepaid is paying in advance. You buy a recharge — a dollar amount, or a set number of days with an allowance of calls and data — and use it until it runs out or expires. Nothing is billed afterwards, and there is usually no contract.

Postpaid is paying in arrears. The service runs on an account, and each month you receive a bill for the plan plus anything outside it. The account is normally in the business name, and the plan may be month-to-month or tied to a minimum term.

When prepaid makes sense for a business

• Casual or short-term staff — a prepaid SIM gives a fixed, capped cost with nothing to cancel later.
• Projects and events — a phone or mobile broadband service needed for a few weeks.
• A backup SIM — a spare mobile data service kept for emergencies.
• Strict budget control — when the most important thing is that the bill can never be bigger than expected.

When postpaid is the better choice

• Your main business number — a missed recharge on prepaid means customers can’t reach you. A postpaid line keeps ringing.
• The office internet — when the internet stops, so do your cloud phones, EFTPOS, email and cloud apps. Most NBN and business fibre services are sold postpaid.
• Bookkeeping — one tax invoice per month in the business name, instead of a pile of recharge receipts.
• Growing teams — adding a line or a staff member is a change to the account, not another prepaid service to keep topped up.

The catch with postpaid: check the contract, not the billing

The real risk with postpaid isn’t the monthly bill — it’s a long minimum term. Some postpaid plans lock a business in for 24 or 36 months, often to pay off handsets or equipment, with exit fees if you leave early. Postpaid and “no lock-in” are not opposites: a month-to-month postpaid plan gives you the reliability of postpaid with the freedom of prepaid. Before you sign, ask:

• What is the minimum term, and what does it cost to leave early?
• Is the price per line or per user?
• Are calls included, or billed per call on top of the plan?
• When do I start paying — at sign-up, or once it’s working?

Prepaid mobiles and a business phone system

With a cloud phone system, the business number isn’t tied to a SIM. Staff install the free mobile app, and calls to the business ring on their phone and go out showing the business number — whether that phone is on a prepaid or postpaid mobile plan. The mobile plan just carries the data. It’s a simple way to keep personal and business calls separate without buying every staff member a business SIM.