Billing types (per hour, fixed price)

Written By Matti Parviainen

Last updated 27 days ago

Every project in Operating has a billing type that determines how revenue is calculated. You set the billing type when creating a project — it can be changed later, but doing so recalculates all financial data for the project.

Time-and-materials

The client pays for actual hours worked at agreed billing rates. Revenue is earned directly from time entries: each tracked hour generates earned revenue at the applicable rate from the rate card.

This is the most common billing type for consulting engagements. Use it when the scope is flexible or when the client contract is structured around hourly rates.

→ How to set up a time-and-materials project

Fixed-price

The total contract value is agreed upfront. Revenue is not driven by hours — instead, it's determined by the project's budget and the revenue recognition method you choose. You must add at least one budget for revenue recognition to work.

Use this when the client is paying a fixed amount for a defined scope, regardless of how many hours the work takes.

→ Fixed-price projects → How revenue recognition works for fixed-price projects

Non-billable

Internal work that does not generate revenue. Costs are still tracked if cost rates are configured, but there are no billing rates and no invoicing.

Use this for internal projects such as R&D, training, company events, or other non-client work. Every organization also has a special Time off project, which is a system-managed non-billable project for holidays and vacations.

Choosing the right billing type

Billing type	Revenue source	Budgets needed?	Revenue recognition?	Invoicing?
Time-and-materials	Time entries × rates	Optional (for tracking only)	Not applicable	From time entries
Fixed-price	Budget value	Required	Yes — choose a method	From budget/schedule
Non-billable	None	No	No	No

If you're unsure, most client projects are time-and-materials. Fixed-price is used when the contract specifies a total price for the engagement. Non-billable is for anything internal.

Known limitations (early 2026)

No real support yet for retainer billing type – you must create fixed-price budgets back to back
No real support yet for “time and materials, with a hard budget ceiling” also known as “per hour, capped” billing type
All budgets in the same project have to have the same billing type. We intend to keep it this way. Hybrid billing types can get extremely complex and confusing. Consider running multiple parallel projects when that is the reality.