Unique automated project invoicing
It is possible to mix several contract types on the same project, providing unique automatic project invoicing in your organisation.
In all types, except for prepaid hours, you can separate invoicing and revenue recognition.
This separation allows the project manager to structure the payment plan towards the customer in one way, and the financial officer to divide value into hours and costs, e.g. work, expenses and travels, in another.
The eight contract types overall take their point of departure in Time & material or Fixed price contracts:
1. Time & material – Standard contract
This contract type is the simplest. At its basis, it calculates hours x hourly rate.
When you use a time & material contract, you can split it into several contracts to separate travel time and expenses from the primary delivery/agreement. Or you can divide the project into several budgets to follow the agreements made with the customers.
It is also possible to set an upper limit to what you can invoice and receive a notification when a percentage of the budget has been spent.
2. Time & material – On account with end-balancing
This contract type is often used for large, long-term time & material projects.
On this type of projects, the customer typically pays an amount of the contract value upfront or concurrent with the project. When the project is over, you can invoice with TimeLog's automated project invoicing, and take the difference between the prepayments and the agreed price for the project into account.
Time trackings do not appear when invoicing before the contract is ended, but can be booked as revenue if TimeLog if you use our feature for revenue recognition.
3. Time & material – Prepaid hours
You can use prepaid hours when your client pays a portion of the agreed hours upfront, and there is an opportunity for the customer to get a discount.
If you use revenue recognition of work in progress, you will see the hours for revenue recognition but not for invoicing.
The project manager may choose to receive a notification when a set percentage of the prepaid hours have been used, so the client can be contacted in time before the prepaid hours expire.
4. Time & material – On accounts with periodic balancing
This contract type is used when you perform periodic (usually monthly) work such as salary management, bookkeeping or service agreements.
In this scenario, there is an expectation of how many hours should be delivered.
The customer pays upfront when the month starts and is invoiced when the month ends. When the customer is invoiced, the prepayment is deducted from the actual number of hours.
5. Fixed price – Standard contract
You may have several fixed price contracts on the same project to get easier overview of large and complex projects.
Each contract contains its separate budget, payment plan and income.
All fixed price contracts can contain external expenses such as expenses for sub-suppliers. You choose what amount of the contract value the external expenses should represent of the internal value distribution.
6. Fixed price – Continuous service contract
This contract type is applied when you perform periodic (typically monthly or yearly) work such as salary management, bookkeeping or service agreements.
You can view this work as small periodic fixed price projects. When the period ends, hours and expenses are divided on the period payment as a periodic fixed price project.
With a simple setup on the contract, you can define when payments should take place. A new payment will be created automatically, so you have payments ready for the next 18 months.
In this way, you see your income potential when making forecasts.
You can arrange a repetition pattern for invoicing where you decide:
- Start of the agreement, e.g. May 1, 2020
- Period: e.g. month
- Budget period start, e.g. the first day in each month
- Budget for number of hours, budget amount and budget for expenses
- Payment for each period
- When payment is due, e.g. last day in the period before the budgeting period
7. Fixed price – Task-driven revenue
On this contract type, each task on a project gets its own contract. As opposed to a normal fixed price project, where groups of tasks are connected to an overall payment plan.
The payments are then attached to each task.
It is possible to divide the tasks into sub-tasks and allocate a part of the overall value of the contract to each sub-tasks.
8. Fixed price – Continuous item invoicing
This contract type is used when you perform periodic (typically monthly or yearly) work such as salary management, outsourced bookkeeping or invoicing of software licenses.
Here, your customer pays per transaction and not per hour.
A recurring payment may be determined in advance, based on a fixed number of goods for invoicing.
Through our API, it is possible to make an automatic update of the number of units that should be invoiced, e.g. payslips for a customer.