Set up and invoice fixed fee projects in Zoho Projects
Set up a fixed fee project in Zoho Projects and invoice it in stages. This article is for project managers and anyone who invoices projects.
Applies to: Zoho Projects – All clients
Fixed fee or time and materials
In Zoho Projects you can run a project as Time and Materials or as Fixed Fee.
- Time and Materials: you invoice the actual hours and costs that go into the project.
- Fixed Fee: you invoice a fixed, agreed cost, no matter how much effort or material the project takes. For example, you buy a house off the plan and the contract says it will cost $415,000 to build to the specifications.
Set up a fixed fee project
- Open the project settings.
- Under Billing Method, select Fixed Cost for Project.
- In the field that appears, enter the contracted billing value. This is the fixed cost to your customer, excluding taxes.
After setup, run the project as normal. Use timesheets, expenses and bills in the usual way. For the project manager, a fixed fee project works the same as a time and materials project. The only difference is that any budget overrun isn't charged to the customer.
Invoice a fixed fee project in stages
By default, a new invoice is for the full contract value. If the project has staged payments, replace that value with the contracted stage payment.
Example: a two-milestone project with a fixed cost of $100,000 and four invoices.
| Invoice | Share | Amount |
|---|---|---|
| Ramp-up | 20% | $20,000 |
| Milestone 1 complete | 40% | $40,000 |
| Milestone 2 complete | 30% | $30,000 |
| Acceptance | 10% | $10,000 |
- In the project, go to the Finance module and create a new invoice.
- The invoice has a single line for the whole amount, with a date range and the project description. Overwrite the description to show the payment stage.
- The invoice shows the full fixed fee. Overwrite the amount with the stage payment.
The next invoice you create defaults to the remaining amount (project fixed cost minus previous invoices). In the example, the next invoice defaults to $80,000. Overwrite it with $40,000 for the 40% at Milestone 1. The last invoice is exactly the amount that remains.