Overview of fixed fee projects

Created by Monica Madan, Modified on Mon, 15 Jul at 11:53 AM by Monica Madan

  • Plan Availability
  • Essential
  • Standard
  • Premium
  • Enterprise

The Fixed Fee billing method involves setting a pre-established price for a project, regardless of the time and resources required. This approach provides cost predictability for clients, who pay a set amount for the entire project. For businesses, it enables them to manage their budget and gain a clear understanding of the project's financial scope.

Take a course on Financial Management here.


In this article


Key concepts for navigating the financials dashboard


Fixed fee budget is the cost your customer pays you for the project. 


Budgeted hours: When you create a project, you typically estimate or set the total number of hours that you expect it will take to complete the project as budgeted hours.


Allocated hours The total number of hours allocated for the project via resource management.


Tracked hours refers to the total number of hours that your team has tracked for the project. It represents the actual time spent working on the project and is reported using timesheets.


-> Forecasted values are calculated based on the resource allocation plan for the project.
-> Actual values are calculated based on the time tracked during the delivery of the project


Current Recognized revenue


Recognized revenue is the portion of the fixed fee budget that can be recognised based on the percentage of progress made on the project.  

More on revenue recognition formulas here


Cost is calculated based on the teammember's tracked hourly cost rates.

Hours tracked * Cost rates of respective team members/roles


Profit is the difference between recognised revenue and cost incurred

Recognised revenue - Cost


Profit Margin is the ratio of profit to recognised revenue 

(Profit/Recognised revenue)*100



Forecasted Recognized revenue 


Recognized revenue is the portion of the fixed fee budget that can be recognised as per the hourly resource allocation plan for the project.  

More on revenue recognition formulas here.

Forecasted cost is calculated based on the team member's allocated hourly cost rates.

         Allocated hours * Cost rates


Forecasted profit is the difference between forecasted recognised revenue and forecasted cost.

        Forecasted recognised revenue - forecasted cost


Forecasted profit margin is the ratio of forecasted profit to 

        (Forecasted profit / Forecasted recognized revenue)*100


Accessing the Financials for Fixed fee projects


Get real-time insights into your project's revenue recognition and time usage with the financial dashboard. Track and compare actual revenue recognition with forecasted revenue recognition for completed portions of your project, and make necessary decisions for smooth project management.


To access Financials,


  • Navigate to Projects

  • Select a Fixed fee project you wish to view

  • Click on the Financials tab to track your project budget usage alongside the project hours.


Revenue Tracker

The Fixed Fee budget tracker enables you to track recognized revenue relative to the fixed fee budget and determine the remaining amount. 


 


Hours Tracker

The Budgeted hours tracker helps monitor tracked hours in comparison to the budgeted hours and identifies the remaining budgeted hours.




Progress Charts

With the progress chart, you can understand  data regarding how recognised revenue and hours usage has progressed for the project over time. This helps you compare the current progress with the planned trajectory of recognised revenue and hours.


Note: 
-> Forecasted values are calculated based on the resource plan.

->Actual values are calculated based on time tracked during the project


More on how revenue recognition is calculated here


Revenue progress


The progress charts provide you with information on the recognised revenue for the project over time.


X-axis is days.

Y-axis is recognised revenue




Hours progress


The progress charts provide you with information on the hours tracked for the project over time.


X-axis is days.

Y-axis is tracked hours

Breakdown Charts

A Breakdown chart shows you the monthly breakdown of recognised revenue and hours usage 

Revenue breakdown


Revenue breakdown


Shows the monthly breakdown of forecasted and actual revenue recognised and the corresponding profit margin


Hours breakdown


Shows the monthly breakdown of billable and non-billable hours and the corresponding allocated hours


Summary table


You can view the detailed summary of hours usage and cost for the overall duration of the projector on a granular monthly basis. 


Hours details table shows the detailed breakdown tracked hours for the project.



Cost details table shows the detailed breakdown cost incurred for the project.



Group byRoles and People Visualize the cost and hours utilized by each role and team member on the project 


Group by Phases and tasks Visualize the cost and hours utilized by different phases and tasks in the project. 


You also can choose the option to view


  1. Cost, profit and margins which are metrics that keep changing based on the time your resources spend on the project.

  2. Estimated revenue and allocated time which are metrics that are planned at the start of the project.
















Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select at least one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article

Contact our support team

Have more questions? Paid users can log in and email or chat with us.

Start your free trial