Time and material – on-account invoicing with periodic balancing

This type of contract is typically seen in industries with an ongoing and well-established cooperation between customer and supplier. Here, the supplier invoices the customer for a budgeted amount every period in advance – typically monthly or quarterly.

Once the period is over, the prepayment is offset against the value of the actual work performed during the period. The customer then receives an invoice including both this balance and the prepayment for the coming period.

This type of contract is often used in consultancies providing ongoing and unspecified assistance for their clients. Another type of fixed-price contract, the Continuous service contract, is based on a well-defined periodic payments.

In TimeLog
In TimeLog, the contract entitled Continuous on-account invoicing with period balancing covers this scenario. As with the On-account invoicing with end-balancing, this type of contract is a combination of time and material and a fixed price.

Using the same model as for creating recurring events in calendar systems, the user creates an invoicing plan, e.g. first day of each month. In time, new on-account payments are automatically added to the invoicing plan. Hours and expenses appear for invoicing along with the on-account payments. Every time an on-account payment is invoiced, a negative offset is created at the end of the same period, which is then invoiced together with the factual amount of time and material.

If you are not using the extension module, on-account periods are concluded (in terms of booking revenue) by finishing the financial period to which they belong. With revenue recognition is done manually, as values are controlled personally.