Invoicing Fixed Fee projects with Zoho Projects

How to setup and invoice fixed fee projects in Zoho Projects

In Zoho Projects, you can run projects based on Time and Materials - where you invoice the actual hours and costs going into the project - or Fixed Fee. In a Fixed Fee project, it does not matter how much effort is spent completing the tasks, or how much material is consumed - the project is invoiced at a fixed, predetermined cost (example - buy a house off a plan, and the contract states it will cost $415.000 to build that house against specifications).

Here is how you set it up:
In the project settings, select Fixed Cost for Project under Billing Method. A field appears to enter the contracted billing value (note - this refers to the fixed cost to your customer, exclusive of taxes).


Once set up, you run the project as normal - you use the time sheets as normal - expenses, and bills - for the project manager, there is no material difference in handling a Fixed Fee project compared to a Time and Material project (other than that any budget overrun is not charged to the customer).

To generate an invoice, simply go into the Finance module of Projects, and Create a new invoice. By default, an invoice is created for the entire contract value. For projects with several staged payments, simply replace that value with the contracted stage payment. See example of a two milestone project with four invoices in the schedule:
Project fxed cost: $100,000
Ramp up invoice: 20% = $20,000
Milestone 1 complete: 40% = $40,000
Milestone 2 complete: 30% = $30,000
Acceptance: 10% = $10,000When creating a new invoice - the only option is to create a single line for the entire invoice, with a date range and project description. At the invoice stage, we can overwrite the description to reflect the payment stage.


Note that the invoice created will have the final amount of the fixed fee - we are going to overwrite that as well as the description.


The next invoice you create will have the remaining amount (Project Fixed Cost - Previous invoices) - in this example, the next invoice will default to $80,000 - which will be overwritten by $40,000 to reflect the 40% at Milestone 1. The last invoice will be exactly the amount that is remaining.

To run through the entire process, you can view this video:





    • Related Articles

    • Projects to Books and Expense Integration

      When you are using Projects, Books, and Expense, the integration between the three is very useful, but not as straightforward to set up. First thing to realise, is that the integration is via Books - i.e first projects are integrated with books, and ...

    • How to assign a client company to Zoho Projects

      Zoho Projects allows you to assign client resources to your project, and assign tasks to them. Client resources have a restricted access to the projects module - for instance, client users cannot enter time in time sheets or see financial ...

    • Zoho Mail Server and Office 365 Outlook - ActiveSync setup

      THIS MAY NO LONGER BE AN OPTION IN THE LATEST VERSION OF OUTLOOK. I CAN RECOMMEND DOWNLOADING ZOHO MAIL DESKTOP LITE (https://www.zoho.com/mail/desktop) Settings on Zoho Mail server First, in the Zoho Mail server, we need to ensure ActiveSync is ...

    • Can I backdate an Invoice in Zoho Books?

      You can enter a date prior to the current date in Zoho Books when you create an invoice. Do note, that the accounting period in which the invoice is dated must be before the lockout date (typically you close a financial year when the accounts have ...

    • How to set up spam control for Zoho Mail (beginners guide)

      If you want to take control of the spam that comes into your inbox, this video is for you. There is no advanced "secret squirrel" settings here. This is aimed at the regular small business owner that manages the email server. The last bit of the ...