Billing Types Explained
Understanding how you bill your clients is fundamental to tracking project profitability. MyProjectBudget supports two billing models: Fixed Price and Time & Materials.
Fixed Price
In a Fixed Price contract, you agree to deliver a defined scope of work for a set price. The client pays based on deliverables or milestones, regardless of how many hours your team spends.
When to Use
- Scope is well-defined and unlikely to change
- Client wants cost certainty
- You can accurately estimate effort
- Deliverables are clearly specified
Key Considerations
- Scope creep erodes your margin
- Underestimation risk is on you
- Change orders needed for new work
- Requires strong scope management
How It Works in MyProjectBudget
Time & Materials (T&M)
In a Time & Materials contract, the client pays for actual hours worked at agreed-upon billing rates, plus any materials or expenses. Revenue scales directly with effort.
When to Use
- Scope is uncertain or evolving
- Discovery or exploratory work
- Ongoing support or maintenance
- Client wants flexibility
Key Considerations
- Clients may push for caps or not-to-exceed
- Requires transparent time tracking
- Revenue depends on utilization
- Rate negotiations are critical
How It Works in MyProjectBudget
Leave & Non-Billable Time
Beyond billable project work, MyProjectBudget tracks various types of leave and non-billable time. This gives you complete visibility into team capacity and helps ensure accurate utilization metrics.
PTO (Paid Time Off)
Vacation days and general paid time off. Counts toward paid capacity but not billable hours.
Sick Leave
Time off due to illness or medical appointments. Tracked separately from PTO for reporting.
Designated Holiday
Company-wide holidays like New Year's, Thanksgiving, or regional observances.
Floating Holiday
Flexible holidays that team members can use on dates of their choosing.
Bereavement
Compassionate leave for grieving the loss of a family member or loved one.
Jury Duty
Civic duty leave for serving on a jury or responding to a court summons.
Parental Leave
Maternity, paternity, or adoption leave for welcoming a new child to the family.
Unpaid Leave
Extended leave without pay, such as sabbaticals or personal leave of absence.
Unbilled Time
Non-billable work hours such as internal meetings, training, administrative tasks, or bench time between projects. Tracking this helps you understand true utilization rates and identify capacity for new work.
How It Works in MyProjectBudget
Side-by-Side Comparison
| Aspect | Fixed Price | Time & Materials |
|---|---|---|
| Revenue Source | Deliverables / Milestones | Hours × Bill Rate |
| Cost Source | Hours × Cost Rate | Hours × Cost Rate |
| Risk Bearer | You (the provider) | Client |
| Scope Flexibility | Low (change orders needed) | High |
| Margin Protection | Depends on estimation accuracy | Built into hourly rate spread |