In the recent times, the need of electricity is growing at a rapid rate where almost every appliance manufactured utilizes the electricity as the fuel has become eco-friendly. With this the cost of the billing by the meter-readers also contributes to additional cost and still there is a chance of human error. Also the market in India is going to get many private electricity distribution companies like that of the Telecom sector. Therefore, there is a need of a type of meter which reduces the cost of Utility to provide electricity and analyze easily the need of customers regarding energy consumption. Also it will help the customers to get the service smoothly and they can even pre-estimate their energy consumption and target to reduce their electricity bills. In this work, the design and simulation of Prepayment Meter for energy consumption in distribution system has been presented. The objectives of this work are: (i) to model a single phase Prepayment Meter for domestic purpose electricity consumption, (ii) to record the values of the parameters displayed by the meter, (iii) to calculate the power consumption, kWh and electricity bill mathematically, (iv) to verify the accuracy and reliability of the meter at different types of load and for different durations with same load respectively with the mathematical calculations. The design methodology is based on Matlab Simulation approach. The Simulation is assisted by Matlab Function Coding Programmes. The verification methodology is based on mathematical calculation approach. Both the measured and calculated values are compared and percentage of error is found out. Results obtained were very satisfactory. The future scope for the work is also mentioned.