A Project billing method is a way in which your project costs will be calculated and invoiced to your clients. You can choose or change a project billing method on the “Update Project” page. Note:  You will not be able to change the project billing method after the creating an invoice based on this project’s expenses (more details here).

There are fife types of billing methods:

• Hourly Task Rate: Amount of logged hours multiplied by task rates
• Hourly Staff Rate: Amount of logged hours multiplied by staff rates
• Hourly Project Rate: Amount of logged hours multiplied by project rate
• Flat Project Amount: This method is also known as a fixed price or fixed fee model, where the entire project is billed at a predetermined cost, regardless of the number of hours logged.
• Task/Staff Day Rate: You charge your client in day rates

There are several project billing types (or project billing type) available, including fixed price, time and materials, milestone billing, and retainer billing. Each project billing type offers different advantages depending on your project needs and client agreements.

Other common project billing types include:

• Milestone billing: Payments are tied to the completion of specific project milestones or phases, supporting cash flow and reducing payment risks.
• Retainer billing: Clients pay a fixed fee on a recurring schedule (such as monthly) for ongoing access to services.
• Time and materials: Clients are billed based on actual hours worked and resources used, offering flexibility for evolving project scopes.
• Cost plus billing: Common in construction, clients pay for direct costs plus a fixed percentage fee for the contractor.

A project billing scheme can also be set up, where payment schedules are tied to project milestones or phases to help manage cash flow and ensure steady revenue.

Selecting the right billing method is important to address project billing challenges such as scope creep, cash flow issues, and client disputes.

Introduction to Project Billing

Project billing is a cornerstone of professional services, ensuring that every project and service provided is accurately priced, tracked, and invoiced. An effective project billing process is vital for maintaining a healthy cash flow, securing timely payments, and fostering strong client relationships. By understanding the different types of project billing and implementing a structured billing process, service providers can avoid common pitfalls such as delayed payments or underbilling. Accurate time tracking and a clear grasp of project costs are essential for creating fair and transparent invoices. In this guide, we’ll explore the various types of project billing, outline the project billing process, and share strategies for improved project billing that support both your business’s financial health and your client relationships.

Project Billing Process

The project billing process is a series of coordinated steps that ensure your services are billed accurately and efficiently. It begins with thorough project planning and resource allocation, where project managers define the project’s scope, set a billing rate, and agree on a budget with the client. As the project progresses, it’s crucial to monitor project progress and stay within budget, making adjustments as needed. Generating invoices is the next step, where detailed records of work performed and expenses incurred are compiled into clear, professional invoices. These are then sent to clients, and the final stage involves collecting payments to maintain positive cash flow. Leveraging project billing software and time tracking software can greatly streamline these billing processes, reduce manual errors, and provide real-time insights for project managers and service providers. By following a structured billing process, you can ensure transparency, improve client satisfaction, and support the financial success of your projects.

Project Costs

Project costs encompass all expenses incurred throughout the life of a project, including labor, materials, equipment, and overheads. Accurately estimating and tracking project costs is fundamental to successful project management and fair project billing. Project managers must carefully consider the project scope, required resources, and timeline to develop realistic cost estimates. Utilizing project management tools and analyzing data from past projects can help service providers refine their cost projections and avoid unexpected overruns. By maintaining a clear understanding of project costs, service providers can set appropriate pricing, ensure profitability, and deliver value to clients while staying within budget.

Hourly Task Rate for Billable Hours

Choose this method and you manage tasks rates in the tasks list as it follows:

This method requires tracking all tasks completed, time spent, and actual time spent on each task to ensure accurate invoicing and detailed invoices. By default, it’s the task price which is taken from the Update Task pages (Sales -> Products List -> My Tasks -> “Price” field on the Update Task page). However, you can manually edit it here – just enter a new rate instead of the default one. This project’s price will be calculated as logged hours (by project members) multiplied by related tasks rates, ensuring that billable hours are properly recorded and differentiated from non-billable activities. To learn more about “How to invoice the project”, click here.

This approach is commonly used in time and materials projects, where billable hours are tracked for each task.

Hourly Staff Rate

When you choose this method, you will see your project members’ rates in the member’s list:

Accurate billing depends on tracking the actual time spent by each member of the project team, especially when they are working on multiple projects. By default, it’s a rate taken from the “Edit Staff” pages (Contacts -> Staff -> “Rate” field on the “Edit Staff member” page), but you’re free to manually edit it at any time – just enter a new staff rate instead of the default one. This project’s price will be calculated as logged hours (by project members) multiplied by related members’ rates, ensuring that the actual time and time spent on each task is properly accounted for. Read here more about “How to invoice the project”.

If you want to change the hourly rate, without changing the rate in already tracked time, follow these steps:

The hourly rates affects all hours which are not billed (invoiced). You need to create an invoice that includes all hours that shouldn’t be affected by the new rate. Whether the invoice will be sent immediately or you set a longer due date – it is your decision. The last invoiced (billed hours) is the moment for the rate change.

• All hours already charged keep the old hourly rate.
• All hours not charged will receive the new hourly rate.
• If you delete or cancel an old invoice, the hours will be released again and charged to the current (new) hourly rate.
• For accurate project billing, it is important to carefully differentiate between billable hours and non-billable hours for each staff member.

Hourly Project Rate

This method will allow you to enter one rate for each of the hours logged to this project:

A project’s total price, or project fee, will be calculated as a sum of the actual time spent (logged hours for this specific project) multiplied by the project’s rate. This approach ensures that the project fee reflects the actual time dedicated to the project, supporting accurate project accounting and enabling precise tracking of project revenue.

Flat Project Amount (Fixed Fee)

This method is a fixed price or fixed fee approach, where the client is charged a set amount for the entire project, regardless of the number of hours worked. The final project price is agreed upon upfront and covers all project deliverables.

A clear payment schedule can be established, with payments tied to predetermined project milestones or the completion of specific project deliverables. This ensures that payments are made as the project progresses and aligns with key stages of the work.

Using a fixed price or fixed fee model helps manage financial risk and supports the project’s profitability by providing predictable costs for both the client and the agency.

You can still mark hours as billable or non-billable for reporting reasons. Please note that if you create an invoice for a project with a flat amount, all tracked hours for that project will be marked as billed.

Flat Amount for Tasks

This is similar to Flat Project Amount but you set the flat amount for each task in your project. This method allows you to tie billing to specific project deliverables and tasks completed, which should be clearly documented in detailed invoices. This amount will not depend on the number of hours logged to tasks. You can still mark hours as billable or non-billable for reporting reasons. Tracking project expenses at the task level is important for accurate billing and helps ensure all direct and operating costs are included. Please note that if you create an invoice for a project with flat amount for tasks all tracked hours for that project will be marked as billed.

If you add “total project cost” as budget method, the task “flat amount” will be summed up and will create the total budget automatically:

Staff Day Rate

The “staff day rate” interacts as a full day rate or half day rate. The billing is based on the daily rate of the staff. For streamlined handling of staff absences, find more infos here.

Task Day Rate

This billing method interacts as a full day rate or half day rate. The billing is based on the daily rate of a daily Task summary . Find more infos here.

Creating Invoices

Creating invoices is a pivotal part of the project billing process, directly impacting your cash flow and client relationships. Each invoice should clearly detail the work completed, expenses incurred, and agreed-upon payment terms, leaving no room for confusion. Using zistemo.com as a billing software to automate the creation and delivery of invoices can help service providers minimize errors, save time, and ensure consistency. Detailed and accurate invoices not only facilitate timely payments but also provide a transparent record of project progress and value delivered. Regular invoicing allows you to monitor the financial health of your projects, address any discrepancies early, and make informed adjustments to your billing process as needed.

Scope Creep

Scope creep is a common challenge in project management, occurring when a project’s scope gradually expands beyond the original agreement—often leading to increased costs, delays, and reduced profitability. This can happen when clients request additional work or changes without adjusting the budget or timeline. To prevent scope creep, it’s essential to define the project scope clearly at the outset and establish firm payment terms. Effective project billing and accurate time tracking help service providers identify when work is exceeding the agreed scope. Implementing a change management process, where all changes are documented and approved by the client, ensures that any adjustments to the project are properly accounted for. By maintaining open communication and using project billing software to track changes, service providers can control scope creep, protect project profitability, and deliver successful outcomes for both parties.

Invoice the clients based on the staff’s time
In zistemo you have two ways of billing your clients based on the time your staff worked for them:

1. You can create an invoice based on the project (will include all the time your staff spent working on a specific project) (Time & Projects ➝ Projects ➝Click the box next to the needed project ➝ Click ‘Generate Invoice’ button):

2. Or you can add staff hours to the invoice during the invoice creation step. In order to do so, first, choose the client (Sales ➝ Invoices ➝ Create Invoice):

If this client has the projects with unbilled time, you will see a link to attach these hours to the invoice:

Then you can use an old or a new invoice wizard to generate the invoice view:

Note: zistemo will always save the last wizard settings and will show it by default next time when you use it.

The invoice wizard

To learn more about the invoice wizard click here

Invoice against a project balance (invoice the project partly)

If you would like to invoice the project partly, generate it as described in Invoicing projects by generating an invoice.
Then, on the invoice page, you can delete unwanted tasks. You will be able to invoice these tasks later by generating a new invoice.

Which staff members can generate the invoices from the projects?

Only the account owner and team leader can generate an invoice through the project.
The account owner can generate invoices for all projects without limitation.
Team leaders can generate an invoice only for projects where they are the managers.

The billing method of the project

When I generate an invoice the rate of the task on the invoice is $0 or incorrect. Why?

The rates of the tasks on the generated Invoice depends on the billing method of the project (Time&Projects -> Projects -> Create Project (or pick one to edit):

So, if you choose an ‘Hourly Task Rate’ method – rates will be based on the tasks rates.
You can change tasks rates on the project page.

If you choose the ‘Hourly Staff Rate’ method – rates will be based on the staff billing rates.
You can change these rates on the project page in the Staff field.

If you choose the ‘Hourly Project Rate’ method – rates will be based on the special project rate.
You can change this rate on the project page in the Project Rate field.

If you choose the ‘Flat Project Amount’ method – the invoice will not depend on any rates and tasks. The invoice amount will be a flat amount for the project.
You can add or change this rate on the project page in the ‘Flat Amount’ field.

The ability to change hours on generated invoices

By default, if you generate invoices based on the project timesheets, you cannot change the hours’ amount and price.

But you can enable this ability by going to Settings -> Preferences -> mark the checkbox “Allow editing for Invoices generated through the Invoice Wizard”:

Now you will be able to edit the number of hours and the prices.

Each time when you change it, zistemo adds an info message in the invoice history:

Unapproved hours in Invoice Wizard

If you are using the ‘Approve Timesheets’ feature (more here about it here), then the logged hours of staff members can be Approved or Unapproved.

For instance, if a staff member just logged time and didn’t send it for approval or if they did send it, but you (as account owner or admin) didn’t confirm it yet, these hours cannot be billed (cannot be included in the invoice).

In case this happens, you will see this information in the Invoice Wizard.

Next, you can go to the Timesheets page and approve them or keep as it is, to invoice only already approved hours.

If you want to, that “Attach to project” is checked by default, please enable it in the Preference Settings -> Expense:

You will not see this information (attached expenses) on the project page. But you will be able to attach these expenses to the invoice generated from this project.

Your client will pay these additional expenses through the invoice.

Expenses for an internal client project

Are you selling projects to clients? (e.g. in real estate)
Track your expenses on internal projects and add them automatically to the final project invoice.

To do that, follow the simple steps: ‘Expense’ tab ➝ ‘Add Expense’ ➝ mark the checkbox ‘Attach to project’. Select the customer ‘-internal-‘ in order to add the expense to your in-house projects instead of an existing external client.
Then simply choose the exact project that you would like to sell (as in the screenshot below) and finish by pressing ‘Add Expense’. Now, the expense will be added to your project, which then can be invoiced to your client as a whole.

Add several expenses in bulk action

You also can add several expenses to one project with a bulk action. Just go to the expense grid and select several expenses you want to add to a project. Click on top on “Assign to Project”

After you clicked on it, you can choose the client + project and choose if the expenses are billable or not

Once you complete this action, you’ll be able to see this invoice in the Invoices list on your Project Dashboard.

You can easily add such a prefix right on Client’s page (Contacts -> Clients -> Edit client), as shown below:

In this case, the invoice number for this client number will look like:

Also, you can assign a customized prefix to a project:

Therefore, the invoices generated through this project will have the following prefix:

Please, keep in mind:

Just a quick, but important, thing to remember: if your invoice is generated through a project which has a specific prefix assigned and this invoice is for a client who also has a prefix allocated, zistemo will use the project prefix.

Generate Invoice by using Inovice Wizard

You can generate an invoice from all the timesheets related to one project or one client by simply using the Invoice Wizard.
Just go to the projects’ list (Time&Projects -> Projects) – click the checkbox to choose one project and click ‘Generate Invoice’.

Also, you can click on the Project name and press the ‘Generate Invoice’ button through the project dashboard.

Client

In the first drop-down field, you can pick the client that should be invoiced:

Use the new invoice wizard

If it’s switched on (green), then you can group time entries logged to the timesheet by using the ‘long’, ‘medium’, ‘short ’or ‘sections’ format read (more about it below). We recommend to use the new invoice wizard.

If it’s switched off (gray), this tool doesn’t group the information and your invoice will include all time entries logged to the timesheet:

Limitations

You can choose all the time logged to timesheet or filter the time logged by selecting a specific date range:

Also, you can pick only the time logged on some tasks:

Projects

Here you can choose one, several or all the projects related to a client – its’ logged time will be included on the invoice:

Invoice Format

Here you can see three options ‘Long’, ‘Medium’ and ‘Short’. Regarding to the selected format it changes the data view on your actual invoice. You will see real invoice data on the invoice wizard to get a 100% true preview about how your data looks on the actual invoice.

Long Invoice Format

Choose the ‘Long’ format if you want to see each time entries displayed as separate lines items (without grouping).
Here you can also uncheck Project Name (incl. Project Number), Team Member and Notes if you don’t want to have this information on the invoice. See the sample shown below how the invoice will look like. You will see real data from your project.

Medium Invoice Format

Choose the ‘Medium’ format if you want to show time entries grouped by task.
Also, you can uncheck Task Name, Project Name (incl. Project Number), Team Member and Date Range. When you uncheck e.g. Team Member, then all the time logged by any members to one project and task will be grouped in one line. The same happens if you uncheck Project Name (all the time logged by one member to one task will be grouped, regardless of the project it belongs to) or ‘Task Name’ (all time logged by one member to one project will be grouped, regardless of the tasks).

Short

Choose the ‘Short’ format if you want to have only one summary line per project – all time entries logged to one project will be grouped in one line. That means also, if you having several prices per task or stadd, it calculates the average price, so you won’t see the price you set up in the project. Sometimes, a rounding problems could occur calculating the average price making it appear different from the exact rates you originally entered. In that case it puts automatically as quantitiy and unit “1 Project”. It’s a simplified view that avoids showing multiple lines while keeping the total amount correct.

You can uncheck the Date range only. Recommended if you have to handle small projects which don’t include many tasks.

Sections

Choose the ‘sections’ format which helps you to group time entries by project and their sections.
Note: You have the ability to attach the Asana time entries to the invoice only with sections name (without the project name). In case your client requests more details, you can instantly
create a full time-sheet report and attach it as PDF to your invoice.

Detailed time entries information (Timesheet Details Report) attached to the Invoice

If you wish you can attach the Timesheet Details Report with the detailed information about all time entries logged to your invoice  by all staff members to all projects (which are chosen on the wizard page) – just check ‘Attach a detailed timesheet report’

In this case, you will have this report as a PDF attachment to the generated invoice.
This feature is especially helpful if you don’t want to have all time entries featured in invoice item table (if you group this information and only display a summary) but your client needs the detailed timesheet report. After clicking ‘Generate’ on the Invoice Wizard, you will see this report attachment below the invoice items table:

Or below the invoice document on Invoice Preview page:

Just click this green link to open and review the timesheet report.

Flat Project Amount

If you’re working on the project based on the ‘Flat Project Amount’ billing method (read more about them here), it means that the project price is constant and it doesn’t depend on the rates and hours spent by your staff on this project.
You can invoice this amount in several stages.

Step 1. Choose the invoice with Flat Amount and click ‘Generate Invoice’:

Step 2. Enter the amount which should be invoiced and click ‘Generate’:

Next time when you will generate an invoice for this project you will be able to enter the remaining value until the full amount will be invoiced.

Learn here how to change the invoice unit 

Flat Amount for Tasks

This billing method is similar to a ‘Flat Project Amount’ billing method but the difference is that this method allows you to set a flat amount for each task.
Therefore, if you generate an invoice, you can also enter the needed amount which should be invoiced for every task.

For instance, in this invoice, you will also have a few individual tasks with their flat amounts:

If, for ex. you have a few different stages for the project and want to bill the client just for one stage, then on this page (after clicking Generate Invoice) please set the tasks you don’t want to see on the invoice to 0:

Then after clicking ‘Generate’ those tasks won’t be included in the invoice:

Learn here how to change the invoice unit 

Tracking the invoice amount on the project dashboard

Project Cost – it is the flat project amount, entered by you on the project page:

Created with the invoice generator: it is already invoiced flat project amount via invoice generator.

Remaining value = Project cost – Created amount with the invoice generator.

You can also track the data about already invoiced flat project amount and the remaining value on the invoice generator page:

Manually added invoices – it is the amount of the invoiced items assigned to the project. How to assign an item to the project on the invoice page, you can read here.

Expenses – Shows the expenses which are assigned to the project. How to assign the expenses to the project, you can read here.

Closed Tasks

If a task is closed you see a checkmark besides the task name. So, you can see which tasks are completed and which are still open.

Use Personal Day as unit if you don’t want to see hours per task but the project day rate instead.

Example:
Task has 22 hours and my project day rate is 8h.
I want to see 2.75 Days instead 22 hours.
or with 6 hours:
I want to see 0.75 Days instead 6 hours.

zistemo will print the calculated “day rate” on the invoices. On reports, zistemo will print the hours.

1. Use “Personal Day” as task unit in a project

On the right site, you will find the option “Use Personal Day as task unit”. Choose the “personal day work time”. Zistemo will overwrite your PD hours only for the current Project (on hourly staff rate – option). Zistemo will then calculate on this basis the “day rate” exactly per minute.

Your staff can track hours via timer or enter the time manually to the timesheet:

If you crate an invoice out of the project, with the “Use Personal Day as task unit” option, zistemo will print the hours as decimal hourly calculation: 5 hours of 8 (budget) = 0,625 Day:

Zistemo will print the value on the invoice:

Then, you can enter the new next invoice date for the invoice:

After you changed the invoice date, the next invoice will be sent on the date your entered. The period will stay the same and will continue as usual after the manual invoice date.