A change to automatic water meters means the first round of bills cover a five-month period instead of the usual three, so the council has given residents longer to pay. The bills are due by November 1.

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"We know conditions are very tough. It is so important to conserve as much water as possible at this time," a council spokesperson said.

"There are a number of ways council can help including arranging payment plans, assisting people in applying for hardship and referring to agencies that can offer support. Every request will be treated with confidentiality and respect."

The new "smart water meters" were installed in about 4500 households and the council's water services manager Kevin Sheridan said they enabled more accurate water management in a much faster timeframe.

"The meters have already proven their worth in detecting a number of water leaks that were adding to bills of Gunnedah households and businesses," Mr Sheridan said.

"In this time of severe drought, it is critical to not only manage our water resources, but to ensure ratepayers are not paying extra for water leaks."

The water meters offer close to real-time monitoring of water use and the council said it had already contacted a number of householders and businesses about potential leaks.

The new system can also identify illegal water use and may help to prevent tampering with water meters.