Understanding Billing Formats
This video runs thru Fixed Fee, Hourly, and Not to Exceed. It also explains how we eliminate accidental overbilling.
Fixed Fee
Fixed fee billing — also referred to by some clients as stipulated sum, lump sum, or contracted amount — bills against a set dollar amount for the phase. You can label this however you'd like on client-facing invoices; internally, the system always treats it as Fixed Fee.
With Fixed Fee, you set a percentage of the project and a default fee amount for the phase. As you invoice, you'll do progress billings against that fee until the full amount is billed.
If you attempt to bill more than the contracted fee amount, BaseBuilders will prompt you when you save the invoice, letting you know you've exceeded the contracted amount and giving you options for how to proceed. Overbilling is possible if that's genuinely what you intend to do, but it will never happen without your knowledge.
Hourly
Hourly billing bills based on time recorded against the phase, using your billing rates. You can also set a default target amount for the phase.
The target amount isn't a hard cap — it's there to help you track backlog. Even a rough estimate is useful: if you expect the phase to land somewhere in a particular range, entering that target lets BaseBuilders help you measure how much work is in your pipeline. As the project progresses, adjust the target closer to what you expect final billings to be. Over time, tracking this across your projects gives you visibility into total backlog and whether staffing changes may be needed.
Hourly Not to Exceed
Hourly Not to Exceed contracts cap your hourly billing at a set amount. These terms aren't in the firm's favor, but BaseBuilders fully supports them.
You can set a phase to Hourly Not to Exceed in two ways:
- Select it directly from the format dropdown.
- Enter a not-to-exceed amount, which automatically switches the format and enables the corresponding toggle.
When billing an Hourly Not to Exceed phase, bill your billable time slips against the phase as normal. If total time billed would exceed the not-to-exceed amount, BaseBuilders can prompt you to add a discount to the invoice, reducing the bill down to the contracted cap. This keeps the client from being overbilled, and shows them that the work took more time than anticipated while the firm still honored the agreed cap — which tends to make for smoother payment and a client who feels they received extra value.
If a contract specifies not to exceed including expenses, billed expenses count toward the same cap as billed time. The system handles this the same way — applying a discount as needed so the combined total doesn't exceed the contracted amount.
Expenses Only / Time Tracking Disabled
Some phases are meant to track expenses only, with no time recorded against them — for example, a phase covering a fixed fee plus reimbursable expenses capped at a set amount. For this kind of phase, disable time tracking so no one can log time to it, and log expenses against the phase instead. BaseBuilders will apply the not-to-exceed cap to the logged expenses and prevent billing beyond that amount.
A Note on Master Phases
Some of the fields described above are marked optional on master phases specifically. That's because default fee amounts, target amounts, and not-to-exceed values are usually specific to an individual project or proposal, not something you'd want baked into a master phase you plan to reuse across many jobs. They're shown here simply because master phases were the clearest place to walk through all the formats together.
Best Practice
Choose the billing format that matches your actual contract terms — Fixed Fee for lump-sum work, Hourly with a target for open-ended time-and-materials work, and Hourly Not to Exceed or Expenses Only when the contract specifically caps billings. Setting the correct format up front means BaseBuilders will proactively warn you before you accidentally over- or under-bill a client relative to the contract.
Summary
Phases can be billed as Fixed Fee, Hourly, Hourly Not to Exceed, or Expenses Only (often paired with a not-to-exceed cap). Fixed Fee bills against a set amount and warns you if you exceed it. Hourly bills time against a target you can use to track backlog. Hourly Not to Exceed bills your time slips as normal but can apply an automatic discount to keep the invoice within the contracted cap, and the same logic applies when expenses are included in that cap. Expenses Only phases disable time tracking so only expenses are logged and billed against the not-to-exceed amount.