Billing models vs. rate structures
Two independent choices power every engagement — how revenue is recognized, and how the bill rate is set.
An engagement is defined by two independent choices. Keeping them straight is the key to the wizard:
- Billing model — how revenue is recognized (the Type step).
- Rate structure — how the bill rate is set (the Billing step).
You pick one of each, and they mix freely.
Billing models (how revenue is recognized)
| Model | Revenue is recognized… |
|---|---|
| Time & materials | As you log it — hours × bill rate |
| Prepaid retainer | The fee, spread pro-rata over the contract's elapsed time |
| Non-refundable retainer | Like a fixed fee — earned up front; unused time isn't refunded |
| Fixed fee | The set price, pro-rata over time (or per milestone) |
A not-to-exceed cap is orthogonal — it caps recognized revenue at the budget for any model (it only bites on hourly work; on a fixed fee the fee already is the ceiling). Hours past the cap still track, so you see the true cost.
Rate structures (how the bill rate is set)
| Structure | The bill rate is… |
|---|---|
| Inherit rate card (default) | Whatever your rate hierarchy resolves |
| Flat | One rate for every hour |
| By person | Each person's own rate |
| By task type | The rate for that kind of work |
| Blended (person or task) | One headline rate billed, with a target mix tracked for realization |
Full detail on these lives in Rate structures.
"Prepaid retainer, billed by person" and "Time & materials, flat rate" are both valid — the model decides when money is recognized, the structure decides how much per hour. The wizard asks them on separate steps for exactly this reason.
Recognized revenue, cost, and margin only appear for roles granted billing/cost visibility. Owners and admins have both by default; a manager sees revenue but not cost or margin.