Charging by the hour and charging a fixed price are both fair ways to bill. They differ in who carries the risk when the work takes longer than expected: by the hour, the client does; at a fixed price, you do.
When hourly works best
- The scope is unclear or likely to change, such as ongoing support, research or consulting.
- The client wants to direct the work as it goes.
- You are new to this kind of work and do not yet know how long it takes.
The downside: the client sees every hour, may question them, and you earn more only by working more.
When a fixed price works best
- The deliverable and the number of revisions can be written down.
- You have done similar work before and know how long it takes.
- The client needs a budget they can approve once.
The upside: if you work efficiently, your effective rate goes up. The risk: if the job runs over, it goes down, sometimes a long way.
How to quote a fixed price
- Look up how many hours similar projects really took. Tracked hours are far more reliable than memory.
- Multiply by the hourly rate you need. The hourly rate calculator gives you that figure.
- Add a margin for the unknown, often 15 to 30%, depending on how new the work is.
- Write down what is included: the deliverables, the number of revision rounds, and what counts as extra.
- Agree how it will be paid: a deposit, then milestones or delivery.
Retainers: a third option
A retainer is a set amount each week or month for an agreed amount of work or availability. It suits ongoing relationships, such as maintenance or a monthly content plan, and it makes your income predictable. Say what happens to unused hours and what it costs to go over.
Keep tracking time on fixed-price work
Even when you do not bill the hours, track them. It is the only way to know what a fixed price really paid, and the record you need to quote the next one well. See Your effective hourly rate.
How Involets does it
A project in Involets is hourly, fixed price or recurring. Hourly projects bill the time you tick. Fixed-price projects bill in parts and show what is left, and Involets will not let you bill more than the price. Recurring projects draft an invoice each week, month or few days. You can track time on any of them, and Reports show the effective hourly rate behind your fixed prices. See Clients and projects.