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Fees & billing3 min read

Fixed fee or hourly? Price the phase, not the project

Use fixed and hourly phases deliberately: define scope, record effort and keep additional-service approval clear. A mixed-fee example shows how the billing fits together.

Architect sketching a floor plan at a studio desk
Photography by Daniel McCullough
In this article

A commission does not have to use one billing method for every service. A clearly defined design phase and an open-ended additional service may call for different arrangements. What matters is that the scope, compensation and billing basis are explicit.

A fixed fee, an hourly rate and a billing milestone describe different aspects of the agreement. A phase can have a fixed fee that is invoiced progressively. Recorded hours can still be useful even when they are not the basis of that invoice.

Use a fixed fee with a defined scope

Record the deliverables, included reviews, assumptions and completion basis. Internally, estimate the effort needed to perform that work and keep recording actual time. That helps explain how the phase is progressing without turning every recorded hour into a client charge.

Unexpected effort does not automatically change the agreed fee. Distinguish a difficult part of the original scope from a separately requested service. The financial treatment should follow the agreement and approval process.

Use hourly billing with an explicit rate basis

State which services are hourly, the applicable rates, the period of billing and any agreed review or authorization limits. Keep time entries specific enough to support a useful billing review. An hourly arrangement still needs a clear description of the work.

In Rizqo, the rate is stored on the time entry when it is created. Updating a rate card later does not silently rewrite historic time. Check the rate and its source before preparing an invoice.

Mix the methods within one project

An illustrative mixed arrangement
ServiceBilling basisCurrent billing
Design developmentA $12,000 fixed phase at 50% cumulative progress; $3,000 already invoiced$3,000
Separately authorized hourly servicesEight unbilled hours at $150$1,200
Current invoice before adjustmentsNo taxes, credits, expenses or retainer application in this example$4,200

The fixed calculation uses progress and previous billing. The hourly calculation uses eligible unbilled time and the applicable rate. Neither should be substituted for the other.

The example is an explanation of billing logic, not a suggested fee or standard phase allocation. Your project and agreement determine the actual figures.

Keep additional services visible

Record the new request, how it relates to the original scope, the proposed commercial terms and approval status. A separate phase or record can help distinguish the service, but adding it to an application does not prove that the client approved it.

Use the additional-services log to keep the request, decision and eventual invoice reference together. Reconcile its status with the agreement before billing.

Keep recording effort on fixed work

Hours on a fixed phase show where effort went. They can help identify rework, missing assumptions or a phase that needs a closer review. They do not, on their own, show profitability: that requires an appropriate cost basis.

Also record non-billable work consistently. A report built only from hours likely to appear on an invoice leaves out part of the effort needed to run the practice.

Set up the workflow deliberately

Rizqo supports fixed, hourly and non-billable phase types within one project. Set up the phases, amounts and rates, enter time manually and review the invoice assembled from eligible progress and hours. Phases remain a commercial structure, not a substitute for agreement review.

Read fee structures, use the invoice worksheet and explore the billing workflow. Book a demo to see how the mixed example is represented.

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