When creating a new project with the Project Planner, you have the option to set the fee type to either Fixed or Hourly for each of your phases. Understanding the impact each option will have on your phase, and the overall project budget will determine which fee type is best used.
Fixed Fee Type
When to select Fixed Fee Type:
You know or can estimate the phased budget that you'll need to work within
You and your client have an agreed contract amount per phase
The allocated dollar amount for this specific phase is guaranteed regardless of how many hours you work.
Things to note when using Fixed Fee Type:
All fixed fee phases will impact (add or subtract from) your Project Budget
You can still invoice your client hourly even if the fee is set to Fixed
Hourly Fee Type
When to select Hourly Fee Type:
You do not know what the budget is for the phase, because it's either an unknown scope or additional services.
You do not know if you'll work 1 hour or 100 hours on that phase, but the client will pay you in either setting, aka a truly hourly phase
Things to note when using Hourly Fee Type:
You will notice that once Hourly is selected the "Budget" box in the phase will change to "Max Cap" and this phase is now considered "not-guaranteed"
All hourly fee-type phases will not impact the overall Project Budget, since the phase is considered as a "stand-alone".
Unsure Which Fee to Select?
Another way to consider the use of Fee types in the Project Planner is as an "on/off" switch, implying that this phase is either guaranteed to consume from your Project Budget (on) or not (off). For instance:
If a phase has a Fixed fee, it is guaranteed for that phase since the budget has already been set. Therefore, any allocated fees within that phase will be working towards the Total Fee and Project Budget.
If a phase has an Hourly fee, it is not guaranteed for that phase since the total hours you will work is unknown. Therefore, while allocated fees within that phase will be working towards the phase's "Max Cap", it will not be working toward the Total Fee and Project Budget.
🎓 Pro-Tip: We always suggest using Fixed fee as the type UNLESS you really can not say whether you will work 1 hour or 100 hours on the phase.
Both Fixed fees and Hourly fees are used for calculating data when running reports on the Reports page, including Projects and Team Forecast
When running a Planned Profit or Profit Drivers report, both Fixed and Hourly fee phase projects will be included in your totals. You can choose to filter by specific fee type by using the filter option on each of these reports.