Fixed Price Quoting and Invoicing
The billable values in your quotes, estimates and invoices are, by default, based on a calculated value. This value is typically a quantity multiplied by a rate, such as hours worked times a billable rate.
When you create a quote or an invoice for a job, you can use the Fixed Price pricing mode, which allows you to change the price shown for each billable item. You should use the Fixed Price pricing mode when you plan to:
- make adjustments to the price shown on the quote or invoice for specific tasks or cost items
- bill your client progressively (by amount) as work proceeds.
Once you have selected Fixed Price mode, an extra Fixed Price column appears on your quotes, estimates or invoices. Initially this column displays the same number as the calculated value, but you can edit the value line-by-line if you wish.
Fixed priced quoting
You can use a quote, created in Fixed Price mode, as the basis for a job. When you bill your client for the job, the quoted prices automatically flow through to your invoice as editable values. You can then make any required changes to the quoted amount shown for each billable item.
If the job is based on a quote, the quote's pricing mode becomes the default for any invoices you create for that job. Plan ahead, and use the same pricing mode for both the quote and the invoices – don't use one pricing mode for the quote and the other one for the invoices (see the example and note below).
Fixed price invoicing
If the job is:
- not based on a quote, create the progress, final or miscellaneous invoice in the usual way, then select the Fixed Price pricing mode on the Invoice Information screen. This will allow you to adjust line item values directly, possibly to cater for agreed variations or previous over- or under-charges.
- based on a quote, make sure that when you create the quote, its pricing mode is set to Fixed Price and just accept that default when creating each invoice. This will allow you to adjust line item values directly and – more importantly – to bill any line items progressively over several invoices.
For example, you have quoted $1000.00 to perform a task. On the first invoice you may want to invoice out $250 of the $1000, because you have completed one-quarter of the work on that task. You would override $1000 in the Fixed Price column with $250, and issue the invoice. On the next invoice, the un-invoiced balance of $750 is available to invoice out. You can then invoice the full $750 (or a smaller amount), as you wish.
If you created the quote for a job on a Calculated Price basis, you can still change your invoice to Fixed Price mode. This will allow you to override the $1000 in the Fixed Price column with $250, and issue the invoice. This is not recommended, as the un-invoiced balance ($750) will be written-off and will not be available to invoice out on subsequent invoices. Therefore, if you intend to progressively invoice out quoted values on a line-by-line basis, always select the Fixed Price mode on your quotes, otherwise you run the risk of inadvertently writing off un-invoiced amounts.