(This help article is still WIP, to be expanded later in 2026.)

Top things to get right with fixed-price projects

Before: the sales & planning

You’re most likely pulling the deal value (amount) from your CRM – make sure that you’re planning the work according to the latest scope. If you’ve set rates and costs in Operating, you’re able to follow the gross margin. Include buffer for scope creep (10-20% is common). Fixed-price means you absorb overruns, so conservative estimates protect you.

Payment milestones - Structure payments around deliverables or phases, not just time. Front-load payments if possible (30-40% upfront is reasonable). Schedule your invoicing ahead of time to match this.

Change order process - Establish clear procedures for handling scope changes before signing. Make it easy but formal.

During: the project delivery

Follow project hours closely – even if the number of hours doesn’t affect how much you invoice. The planned vs actuals report for Projects is a solid tool for this.

After: the project has been completed

In project details, you’re able to see the effective hourly rate that the work had.

Your fixed price project will stay visible in the Invoicing list until you’ve invoiced the full budgeted amount.

Fixed price budgeting

Set budget for the whole project duration first. Split it into parts only if that’s necessary.

Budgets don’t have status – the revenue will be confirmed if the project status is confirmed.

The sum of all budgets will be the total value of the project. If you have work outside of the budget durations, it will be considered free of charge.

Revenue recognition

Revenue recognition methods that are supported:

1. Based on time planned or tracked, weighed by hourly rates

2. Evenly by month

3. Evenly by week

Method 1 is recommended: it takes into account the opportunity cost of each person working in this FP project. Their rates (coming from rate card or set more specifically) communicate the relative value of their contributions. For example, 10 hours of your most senior architect’s time is more valuable than 10 hours done by your summer intern. This is only method that allows us to attribute revenue to individual people.

If you prefer not to value team members’ time differently, don’t assign rates to people, roles or positions. Then, every hour has the same value.

Forecasting future revenue is based on the work allocations. The future revenue is based on budget timespans. If you have work outside of the budget durations, it will be considered free of charge.

Actual revenue recognition based on time tracked is possible after work has been done. If you want to recognise revenue during the budget duration, e.g. for the last full month, communicate the progress % of the budget on the last day of the latest month:

• You now have known progress for past work – thanks to the progress indication

• You now have time tracking actuals – no longer relying on the planned allocations

Setting the progress helps determine how much of the project you have already delivered.

With this, you’re able to follow the project completion also when it’s deviating from the invoice schedule.

If you don’t mind waiting to see the earned revenue until the whole budget is in the past, you can just skip the progress% indication and be fine. Past budgets will be considered 100% completed.

Changes to the fixed price

Make sure to add extra work (with a positive budget increase) as tentative to the same project and confirm the allocations when your client greenlights the changes. With the change order process you established early on, this is easy and doing it in writing feels natural.

We support two ways of adding additional work:

Separate project for the additional budget

• If you have a tentative additional budget coming up, it might make sense to keep that as a separate tentative project – planning the budget, schedule, team setup and allocations over there.

• Once the client greenlights the change, it’s easy to merge the additional piece into the ongoing confirmed project. There may be some duplicate positions, but other than that, the budgets and allocations are transferred nicely. Just make sure that two budgets can never overlap.

Tentative allocations inside the same project

• Add new allocations as tentative first, use the probability% per work effort if you like

• Adjust the project budget when the change has been agreed upon

  • Also remember to change all related allocations to confirmed