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Fixed fee pricing

Managers need to know how well do they succeed in setting prices for fixed-price projects. This is why when invoicing projects with fixed fees, it is important to be able to compare billing with the actual value of entered hours.

Price lists should always be set with hourly rates even if you are going to invoice the customer based on fixed fees. The hourly rate equals to value of work hour. So, in short, all projects should have price lists where hourly rates are defined, so that work hours entered for the project will have value and it's easier to follow projects productivity.

Price lists have Bill checkbox that controls if the work hours really go to invoice, or if the work hours are only considered as value for the project and invoicing is done with fixed fees.

Work hours with price are considered as billable, even if the invoicing is done with fixed fees. This ensures that employees Billable % is correct regardless of how project is invoiced.

Using fees

If you want to invoice your customer based on fixed fees but want to also see if your project is productive based on actual hours you can use the Bill checkbox to define that hours are not invoiced from customer even if they get an hourly rate (value). You can of course bill any of the hours manually even if the Bill checkbox is not selected.

Project-specific price list

If you have selected a project-specific price list you can set manually the Bill checkbox for different rows on project. So some work hours can be billable and some not. For example if you are billing your customer with a fixed fee but have agreed that extra hours are billable then you could mark those extra hours as billable and all others as non-billable (invoiced using fees).

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Price list from Settings

If you have selected a price list that comes from settings the Bill checkbox cannot be edited. If you need to bill some hours or need to do changes you have three options:

  • Check if the setting is set correctly for the price list in Settings > Price lists
    • Note that all projects using the price list are affected when changing the price list in Settings
  • Use another price list or
  • Convert to project-specific price list
    • Note that when converting to project-specific, changes done to price list in Settings won't affect project pricing so for example price increases has to be done manually

Flat rate

You also have a possibility to add flat rate pricing for phases under Phase specific rate exceptions. Note that using this option the value of hours entered to flat rate phases is the Price of additional hours.

If you do not have price for additional hours, it is recommended to use products for the fixed fee pricing rather than flat rate, because if the additional hours price = 0,00. Then all work hours entered for the phase are considered to be non-billable and their value is 0,00.

For example if the price of additional hours is set to 50 eur/h all hours regardless of the work type or the person entering them get 50 eur/h as their value.

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