The current method of preparing electricity bill payment is hectic and consumes lots of time in remote areas where technology advancement is taking place at a slower rate. Even the electricity supplier has to deal with many flaws of the current electricity distribution system such as meter tampering, non-payment of bill on time by consumers, electricity theft issues, difference in electricity generated and electricity consumed etc. The faulty system can contribute to many flaws such as mechanical errors, human errors, wrong photo of meter, blurred meter reading due to dust & dirt on energy meters. The remedy for this drawback is a prepaid energy billing. The automatic prepaid billing system can keep track of the real time usage/consumption. The consumer can recharge the system as per his/her need. The project aims to reduce the consumer lines at the billing counters. The project also aims to propose a system that will decrease the loss of power transmission agency and revenue loss due to power thefts and other illegal activities. The GSM technology is used so that the customer can receive SMS about the consumption of power (in kW/hr) and when it reaches a minimum balance, it would automatically alert the consumer to recharge. The results do provide good feedback and future scope for this project as it is bound to do away with flaws of current billing system e.g. the problems of unpaid bills and human error in meter readings are thereby will be reduced using this prepaid based energy meter.