Billing
Should you charge hourly or a fixed price?
Charge hourly when the scope can still move, and a fixed price when it genuinely cannot. The deciding question is who carries the risk of the work taking longer than expected: hourly puts it on the client, fixed price puts it on you. Track your time under both, because a fixed price you never measured is a price you cannot improve next time.
Why
A fixed price is a bet on your own estimate, and the only way to get better at that bet is to know how the last one turned out. Freelancers who track fixed-price work discover their effective hourly rate on it — sometimes far above their hourly rate, sometimes embarrassingly below — and that number is what tells you which kinds of job to quote fixed and which to keep on the clock.
Do this
- Use hourly for open-ended, exploratory or maintenance work where the end is not visible.
- Use a fixed price where the deliverable is well defined and you have done something like it before.
- Track the hours on fixed-price work anyway, and compare the result to your hourly rate afterwards.
- Write down what is out of scope. On a fixed price, that sentence is the whole protection.
Avoid this
- Quoting fixed on work you have never done before.
- Switching to a fixed price mid-project to end an argument about hours.
- Absorbing scope creep silently because the price is already agreed.
- Never checking what a fixed-price job actually earned you per hour.
What it looks like in the log
The same advice, as the row a tracked session actually leaves behind.
Meridian — fixed-price rebuild
- Quoted
- Fixed, 3 weeks
- Sessions
- 31
- Tracked
- 94h 10m
- Vs estimate
- +18h
All of this is easier when the hours were written down as they happened. Punch O'Clock is a free tracker that does it in one tap, works offline, and exports the range you are billing.
Free. No ads, and no account unless you want sync.
Related questions
Do I still need to track time on a fixed-price job?
Yes, and it is arguably more valuable there. On an hourly job the tracking produces the invoice; on a fixed-price job it produces the estimate for the next one. Without it you are quoting from a feeling.
What about a retainer?
A retainer is a fixed price with a recurring scope, so it needs the same discipline plus one more: track against the hours the retainer covers, so both sides can see when the relationship has quietly outgrown the agreement.