Fixed Fee Deliverables in Time & Materials Projects

You can now put a fixed fee on an individual Deliverable inside a Time & Materials (T&M) project. Until now, a project in Forecast had a single billing arrangement, so agreeing a fixed fee for one piece of work and T&M for the rest meant splitting the engagement into two projects and reconciling them by hand. 

Now, work associated with a fixed fee Deliverable earns its agreed fee instead of billing hourly, everything else on the project continues to bill as T&M, and both feed into one set of project financials.

For example, you might agree ten discovery workshops at a fixed £15,000, then sign a statement of work and bill T&M for the delivery that follows. It's one client and one engagement, so it can now be one project, with the workshops set up as a fixed fee Deliverable and the rest billing hourly.

Jump to... 

• What's New at a Glance 

• Feature Details 

  • What is a Deliverable? 

  • Setting up a fixed fee Deliverable
  • How revenue works
  • Where to see it
  • Invoicing fixed fee Deliverables
  • Billing safeguards

What's New at a Glance

• Fixed fee Deliverables: Enter a Price on any Deliverable in a T&M project to bill it as a fixed fee.
• One project, one set of financials: Revenue Recognition on the Budget page now breaks down into Time & Materials and Fixed Price (Deliverables).
• Deliverable-based invoicing: Invoice a fixed fee Deliverable as a single line, in full or in installments, and track what's outstanding from the project's Invoicing page.
• Built-in billing safeguards: Forecast prevents changes that would cause your revenue to disagree with what your client was billed, or bill the same work twice.
• Baseline no longer required: Deliverables can now be used without turning on Baseline first. Projects already using Baseline carry on unchanged.

Feature Details

What is a Deliverable?

A Deliverable is the thing your client is buying, such as a workshop series, a website, or a report. 

Note: Fixed fee Deliverables apply to Time & Materials projects only. 

Setting up a fixed fee Deliverable

Turn on Deliverables for the project. Go to Project Settings › Tasks > Deliverables and switch it on. You only need to do this once per project.

Add your Deliverables. If the project doesn't use Baseline, go to the Scoping page and select Manage Deliverables, next to Manage Phases. 

If the project uses Baseline, manage Deliverables from the Baseline page as you do today. Give each Deliverable the name your client would recognize from the contract.

Enter a price for the ones you're billing as a fixed fee. Open a Deliverable and enter an amount in Price. 

How revenue works

A fixed fee Deliverable earns exactly its fee, no more and no less, regardless of how many hours go into it. What changes over time is when that fee is recognized.

• The fee follows the work: Forecast spreads the fee across time in proportion to the value of the work associated with the Deliverable. If half the work lands in June, half the fee is recognized in June. This mirrors how Fixed Price projects already behave.
• Before any work is associated: A priced Deliverable with nothing associated shows its full fee as Remaining Work Revenue and zero Actual Revenue, spread across the project's dates until work is added.
• Expenses come off the top: Billable expenses on the Deliverable are counted at face value, and the remainder of the fee is earned by time. 

Note: If expenses on a Deliverable add up to more than its fee, the time portion goes negative. This is intentional and ensures the Deliverable never earns more than the fee you agreed. Unapproved expenses are ignored.

Where to see it

On the project's Budget page, Revenue Recognition now breaks down beneath the total into Time & Materials and Fixed Price (Deliverables). 

Expand either one to see Time versus Expenses, and expand Fixed Price (Deliverables) to see each Deliverable's contribution. The two always add up to your total.

Invoicing fixed fee Deliverables

A fixed fee Deliverable is invoiced as a single line for the fee, rather than as the hours and expenses underneath it. You can bill it all at once or in installments, from the project's own Invoicing page.

Seeing what's outstanding

The project's Invoicing page includes a Fixed Price Deliverables section listing each one, with Fixed Fee, Invoiced, and Remaining to Invoice columns. 

The Confirmed Revenue card now separates Actual Billable Time, Billable Expenses, and Fixed Price Deliverables Revenue, so you can see where revenue is coming from.

Billing the full fee

1. Start an invoice as normal.
2. In the line-generation step, select the Deliverable from the list of Deliverables with an amount left to bill.
3. The Deliverable is added as a line at its remaining amount. Once a Deliverable is fully invoiced, it no longer appears in the list.

Billing in installments

To bill part of the fee, for example 50% up front and 50% on completion, select the Deliverable and edit the unit price on its invoice line. The line is pre-filled with the full remaining amount, and quantity is fixed at one.

For example, on a £10,000 Deliverable, select it and change the unit price to £5,000. On a later invoice, select it again and the line pre-fills at the remaining £5,000. In the meantime, the Invoicing page shows £5,000 invoiced and £5,000 remaining.

Forecast won't let the total billed across all invoices exceed the fee. If you enter too much, the field explains why and the invoice can't be saved until it's corrected.

What won't appear as separate billable items

Time and expenses associated with a fixed fee Deliverable are covered by the fee, so they don't appear as separate billable items on the project Invoicing page, in company-wide un invoiced totals, or on generated T&M invoices. This prevents your client from being charged twice.

Billing safeguards

Once an amount has been invoiced, some changes would leave your revenue out of step with what your client was actually billed. Forecast prevents these changes and explains why:

• Lowering a price below the invoiced amount: You can raise a Deliverable's price, or lower it as far as the amount already invoiced, but no further.
• Deleting an invoiced Deliverable: A Deliverable that has been invoiced can't be deleted. To remove it, delete the invoice first.
• Moving already-billed work into a fixed fee Deliverable: Tasks or expenses already invoiced as T&M can't be associated with a fixed fee Deliverable.
• Pricing a Deliverable that holds billed work: A Deliverable containing work already invoiced as T&M can't be given a price.

Note: To avoid these situations, associate work with the Deliverable and set its price before invoicing.