Billing Type is an important component in billing software that helps to determine how we bill and recognize revenue for a project. There are different billing types supported by various billing software. Some prominent ones are Time And Material (TM), Firm Fixed Price (FFP) and Cost Plus (CP).
Billing type plays a crucial role in Service Industry where project bidding by vendors are prominently based on it. A good billing software with different billing types can greatly benefit an organization.
Billing Types in TotalServ Pro
TotalServ Pro is an end-to-end services business solution that has an integrated time and billing software which supports different billing types that service industry needs today. It has the feasibility to select billing type while creating a job. You can use billing types to deal with different business transactions carried out during job billing. Billing Types allow you to define how revenue will be attributed for the work done. TotalServ Pro supports six billing types.. They are:
• Time and Material
• Fixed price- completion of contract
• Fixed price -percentage completion
• Milestone
• Cost plus
• Internal use
In this blog, let us discuss about Time and Material billing type. Other billing types will be covered in TSP blog series.
Time and Material
Time & Material is billed based on the number of hours worked, at the hourly, daily, or monthly fixed billing rates assigned for that project. In TotalServ Pro, Time and Material billing type has a significant feature like approximate time estimate, possibility of adding changes on the go, payment depends on the hours spent. Time and Material is being billed per hour regardless of the job duration. In TSP under time and material billing type you can set the Rate Structure as Hourly Rate per Job or Hourly Rate per Resource as per your business requirements.
Time and material billing method will be charged according to actuals recorded against the job tasks in a job. This will be a result of resources entering time postings and the project manager approving the entries. Actuals are not created for billing until the project manager has approved the time postings created by resources. With Time and Material, clients can assess how many resource work hours have been utilized for the job and what is the cost incurred thus far.