The Four Billing Models
Most security contracts in India use one of four billing bases. Per guard per month is the simplest: a fixed monthly rate per deployed guard, with deductions for unmanned shifts. Per shift bills each 8-hour or 12-hour shift actually manned, which suits sites with variable requirements. Per man-hour bills actual hours, common for event security and short-term deployments. Per post with relievers built in bills a fixed rate for keeping a post manned 24×7, and the agency absorbs the reliever and week-off cost inside the rate.
The model changes how disputes arise. Per guard per month invites arguments about absent days. Per shift and per man-hour invite arguments about whether a guard was actually present for the full duration. Per post invites arguments about whether the post was ever unmanned. In every case the resolution is the same document: a site attendance record the client trusts. The man-hours glossary entry defines the unit precisely.
Whatever model you choose, the rate must be built up from the same components: the notified minimum wage for the category and zone, the statutory loading (employer PF, ESI, bonus, gratuity provision, leave and weekly off cost), reliever cost, uniform and training cost, the agency's service charge, and GST. The security guard billing calculator builds this stack for one post so you can see how a 12-hour post's overtime changes the rate.
- Per guard per month: simple, but absent days are disputed
- Per shift: fits variable requirements; presence for the full shift is disputed
- Per man-hour: events and short deployments; needs in and out times
- Per post with relievers: agency absorbs week-off and reliever cost inside a fixed rate
- Every model builds from wage + statutory + reliever + service charge + GST
What a Compliant Security Agency Invoice Shows
A security agency invoice is a GST tax invoice and a labour-cost statement at the same time. On the tax side it needs the agency's GSTIN and PSARA licence number, the client's GSTIN and address, an invoice number and date, the service description with the SAC code for security services, the taxable value, the GST rate and amount, and a statement of whether tax is payable under reverse charge.
On the labour side the client's finance team needs enough detail to verify the charge and to satisfy their own principal-employer obligations: site name, posts covered, number of guards by category (unarmed, armed, supervisor), shift pattern, man-days or man-hours billed, the rate per unit, reliever or relief charges, and the statutory components either built into the rate or shown as separate lines. Many clients require the wage, PF, ESI and bonus components to be visible so they can confirm the guards are paid at least the minimum wage.
Attach a site-wise man-hour statement as an annexure: one line per guard per site showing days worked, shifts, and hours, totalled per site. This annexure is what the client's facility manager checks against their own gate records, and it is what turns a disputed invoice into an approved one.
- Agency GSTIN, PSARA licence number, client GSTIN, invoice number and date
- Site, post, guard count by category, shift pattern, man-days or man-hours, rate per unit
- Reliever charges and statutory components (wage, PF, ESI, bonus) shown or itemised
- Service charge percentage and GST with the reverse charge statement
- Site-wise man-hour annexure, one line per guard
GST on Security Services: Forward vs Reverse Charge
Security services attract GST at 18%. Who pays it to the government depends on the parties. When a registered body corporate (a company, for example) receives security services from a supplier who is not a body corporate (a proprietorship, partnership or LLP), the tax is payable by the recipient under the reverse charge mechanism. The agency then issues an invoice showing the taxable value and a statement that GST is payable by the recipient under reverse charge, without charging the tax itself.
When the agency is itself a body corporate, or the client is not a registered body corporate, the normal forward charge applies and the agency charges 18% GST on the invoice and pays it. Agencies structured as private limited companies therefore always bill under forward charge; proprietorship agencies billing companies bill under reverse charge. Getting this wrong means either the client cannot claim input credit or the agency has paid tax it was not required to pay.
E-invoicing under GST is mandatory for suppliers above an aggregate turnover threshold that has been lowered several times; check the current limit and register on the invoice registration portal if you cross it. Confirm your reverse charge position and e-invoicing obligation with your chartered accountant; this article describes the general framework, not your specific filing position.
- GST on security services: 18%
- Registered body corporate client + non-body-corporate agency: reverse charge, recipient pays
- Body corporate agency or non-corporate client: forward charge, agency charges and pays
- Invoice must state the reverse charge position explicitly
- Check the e-invoicing turnover threshold; confirm with your CA
Why Attendance-to-Invoice Reconciliation Fails
Disputes almost never start with the rate. They start with the count. The client's facility manager has a gate register or a memory of unmanned shifts; the agency has a supervisor's WhatsApp confirmation that every post was covered. The invoice arrives with 780 man-days for the month; the client believes it was 756. The gap of 24 man-days, at whatever the rate is, is held back and the whole invoice sits unpaid while it is argued.
The root cause is that the agency's attendance record was created after the fact. Site registers filled at month end, supervisors marking guards present from memory, relievers recorded on one site and not the other. None of this is fraud; it is a paper process that cannot be verified. When the client asks for proof, there is none that they did not already distrust. The guide on verifying guards on site covers the verification side.
Reconciliation succeeds when attendance is captured at the post, at the time, with evidence. A guard marking in with a GPS-stamped selfie at 07:55 at the Main Gate geofence is a record the client can inspect. A site-wise export of those records, matched against the deployment plan and totalled per post, is the man-hour annexure. When the annexure is generated from the same data the guards were paid on, the invoice, the payroll and the attendance cannot disagree.
- Disputes are about the count, not the rate
- Month-end paper registers cannot be verified after the fact
- Capture attendance at the post with GPS, selfie and timestamp
- Export site-wise man-hours from the same records used for payroll
- Share the annexure with the client before the invoice, not after the dispute
The Month-End Billing Process
A clean month-end runs in a fixed order. On the last day of the month, close attendance for every site: all corrections approved, all no-shows recorded, all reliever shifts assigned to the correct site. On the 1st, generate the site-wise man-hour statement and send it to the client's site contact for confirmation, with a short deadline. On the 2nd or 3rd, resolve the exceptions they raise. Only then generate the invoice, on the confirmed count.
Doing it in this order means the invoice is pre-approved before it reaches the client's finance team. It also means payroll, which must be paid by the 7th, is run on the same confirmed count, so a guard's payslip and the client's invoice show the same days for the same person. A guard paid for 24 days who appears on an invoice for 26 is a problem you will eventually have to explain.
For the statutory recovery lines (PF, ESI, bonus shown separately on the invoice), attach the previous month's challan copies when the client asks; principal employers are entitled to confirm that the amounts they are paying for are actually being deposited. Attend Mitra's security agency billing software produces the site-wise man-hour export from guard attendance and deployment so that steps one and two of this process are exports rather than spreadsheets.
- Last day: close attendance; approve corrections; assign every reliever shift to a site
- 1st: send site-wise man-hour statement to client site contact for confirmation
- 2nd–3rd: resolve exceptions; freeze the count
- 3rd–5th: invoice on the confirmed count; run payroll on the same count
- On request: attach PF and ESI challans for the statutory recovery lines
Sample Invoice Structure
The structure below is a working template for a per-guard-per-month contract at a single site with 12-hour posts. Replace the placeholders with your own figures; no rates are implied. For a per-man-hour or per-shift contract, replace the man-days line with hours or shifts and keep everything else.
Header: agency name, address, GSTIN, PSARA licence number; client name, address, GSTIN; invoice number, date, billing period, site name and client purchase order or agreement reference. Body: one line per guard category and shift. Footer: subtotal, service charge, taxable value, GST or reverse charge statement, total, bank details, and the man-hour annexure reference.
- Line 1: Unarmed guard, 12-hour day shift, 3 posts × 26 man-days = 78 man-days × rate
- Line 2: Unarmed guard, 12-hour night shift, 3 posts × 26 man-days = 78 man-days × rate
- Line 3: Reliever cover for weekly offs, 6 slots × 4 weeks = 24 man-days × rate
- Line 4: Security supervisor, day shift, 26 man-days × rate
- Line 5: Overtime hours as per annexure × double hourly rate (if not built into rate)
- Line 6: Statutory components if itemised: employer PF, ESI, bonus, on the wage lines above
- Line 7: Service charge at agreed % on the subtotal
- Taxable value; GST 18% or 'Tax payable under reverse charge by recipient'; total payable
- Annexure A: site-wise man-hour statement, one line per guard per post