Types of Projects
- Time & materials project
Time and materials projects are generally used for service contracts or any other type of work in which the client agrees to pay the contractor based upon the time spent by the contractor’s employees to perform the work, and for materials/expenses incurred during the project.
- Flat rate project
Flat rate projects are projects where the client agrees to pay the contractor a lump sum for fulfillment of the project (no matter how much time is spent in order to deliver the project).
- Non-billable project
A non-billable project is one that you’re not going to bill (for example an internal project).
Time&materials project billing priority
You can set the rate that has priority when creating/editing a time&materials project. If the hourly rate for the selected option is not set, the system will use the next rate that has been set in this specific order: user rate, task rate, project rate, company rate.
In Paymo there are 4 rates used for billing. You can set or modify these rates as follows:
- user hourly rate – go to -> Users -> click on user -> Edit user -> Hourly Rate -> (Set rate)
- task hourly rate – Billing priority (Task hourly rate) – go to -> Project -> Tasks -> Advanced View -> Hourly Rate -> (Set rate)
- project hourly rate – go to -> Project -> click on project -> Project details -> Edit project -> Billing priority (Project hourly rate) -> Project hourly rate -> (Set rate)
- company hourly rate – go to -> Your name (bottom left corner) -> Settings for Your Company -> Invoicing -> Default Price per Hour -> (Set rate)
A time&materials project can have three types of tasks (by billing type): time-based tasks, flat rate tasks and non-billable tasks. The time-based tasks are based upon time spent to perform the work, the flat rate tasks have a fixed price associated with them and non-billable tasks for activities that won’t be invoiced.
Creating price estimates for clients
The hourly rates and the estimated number of hours that will be spent on tasks along with flat task rates allow you to create accurate price estimates for your clients.
In the example below the project has been split into 7 tasks (3 task lists), 6 of them are time-based and one flat. The project billing priority was set to “user hourly rate” and budget hours has been set for each time-based task.
The Estimated Price for time-based tasks is an auto-calculated value (budget hours multiplied by hourly rate) and a value updated manually for flat rate tasks.
This way, at the bottom of the page you have the sum of all tasks which represents the Estimated Price for that project ($10850 in this case) and the budget hours total.