Glossary
Fixed-fee billing
Also called: flat-fee billing · fixed-price project · value-based pricing
Fixed-fee billing is charging a client an agreed total price for a defined deliverable or scope, regardless of the hours it takes. The provider carries the efficiency risk, so the fee is normally invoiced in stages — deposit, milestones, completion — and hours are tracked internally to measure the effective rate.
Last updated October 13, 2026
When fixed fees work
Fixed fees suit work you have done many times and can scope precisely: a brand identity, a five-page site, a quarterly audit. The client gets price certainty; you get rewarded for being fast. They work badly when the scope is unknown, when the client controls the pace, or when revisions are unlimited.
Invoicing in parts
Most fixed-fee projects are billed against a contract balance: a deposit on signing, one or more milestone invoices during delivery, and the remainder on completion. Each invoice allocates part of the agreed total, and the running balance shows how much is left to bill. Partial allocations keep cash flowing and reduce the risk of a large unpaid final invoice.
Track the hours anyway
The fee is fixed, but the cost is not. Tracking time on fixed-fee work gives you an effective hourly rate (fee ÷ hours) per project, which is the only way to learn whether your quotes are right and which kinds of projects are profitable.
Worked example
A $12,000 website project billed 30% on signing ($3,600), 40% at design approval ($4,800), 30% at launch ($3,600). Hours tracked: 110. Effective rate = $109/hour.
In Hoursmith
A fixed-fee project in Hoursmith has its own contract balance. In the invoice builder you allocate all or part of what remains; drafts reserve the amount and sent invoices count it as invoiced, so the balance is never over-billed. Hours tracked on the project stay visible for effective-rate reporting.