The Time and Expenses tools, alongside Mavenlink’s Advanced Project Management capabilities, allow you to track all of your project’s time and expenses with ease. With time and expense tracking, organizations ranging from big to small and even subcontractors can perform all essential business transactions related to a project. Use these tools to manage the productivity of collaborative work teams and see instantly how time and expenses are affecting your budget.You even have the option to tie time directly to a task, deliverable, or milestone for further invoicing transparency.
If you’re a Premier user, time and expense tracking can be done your project workspace or under the Time & Expenses section on the left-hand navigation, where you'll see several options for tracking time—choose from Time Entry, Schedule, or Timesheet view. Depending on the product or service it may make sense to track time by using a time clock to track time up to the minute or you can take a more general approach using the timesheet.
WHAT THE MAVENS KNOW
When to Bill as Time and Materials: There’s a company and a designer (Consultant). In this case, the company wants the designer or the design firm to work on a smartphone application. The project hasn’t been completely laid out yet. The end result is to be determined. However, the company has a general idea and wants the designer to get started.
In this case, it would be best to put the designer on a time and materials structure since the timeline could be ongoing. The designer has no idea how long the project will last so they will be unable to quote the project simply for the work expected. If either party is unsure of how long a project may take then it is probably best to work on a time payment structure, at least in the beginning.
Often when new business relationships are started there is ambiguity on both sides. Paying and charging for time can be a way for each partner to gain an understanding of each other and the work. Once things go on for some time the payment structure can move to a fixed fee model that may be more efficient for both.
When to Bill as Fixed Fee
One occasion when it is best to set a fixed fee is when the scope of the project is reasonably familiar to both parties involved.
Imagine the relationship between a business and its design provider, which could be an entire design firm or a freelance designer. The new task is for the designer to create a new series of banner ads for the company’s online advertising program. This will be the fourth or fifth time the company has had the designer create banner ads.
Both sides are familiar with the designer's skills and both parties are comfortable with the set fee for the group of banners. The project works best with a fixed fee. The company pays for previous experience, rather than the time it takes.
In a situation like this, there will be times when the company pays the same rate for a shorter amount of the designer’s time. The company decision makers probably understand at this point that they are paying for the previous experience rather than the amount of time it takes. There is risk on both sides. The company could pay more than it would cost them if they were to pay by time, but the designer also runs the risk of running into issues on their end of things, which can eat up time.
Additional Thoughts for Consideration
An additional consideration is the nature of the relationship. If a vendor is truly working on one task such as a group of banner ads, it can be best to work by fixed fee. However, if the nature of the relationship is such that the company has the designer working on banners, website updates, email designs, etc. then it might make more sense to pay by the hour. If time is charged at the end of each month, there will be some months that are higher than others.
There can be limits set on both time and fixed fee based relationships. It’s best to have things set beforehand so each party involved understands the possible outcomes. If things change you can refer back to the guidelines put together in the agreement.