Volume invoicing – ongoing contract

The fixed-price contract with volume-based invoicing is an advanced variant of the fixed-price service contract. These contracts are based on goods, not hours, despite these actually being consulting services. Here are some examples of contract types with consulting invoiced as items:

• Number of processed payslips
• Number of monitored servers
• Number of bookkeeping records

In more complex cases, a direct external cost of the goods in question may be attached, e.g. a software license etc. to be handled.

For consultancies, this type of contract is difficult to manage, as the number of items typically varies by month (e.g. number of payslips). Consequently, the monthly budget of the underlying work and the direct costs also vary by month.

In spite of this, IT systems usually do not support the volume invoicing contract, as it will require integrations between the company's financial system, time tracking system and order system or manual entrie 

In TimeLog
In TimeLog, the Ongoing item invoicing contract covers this scenario. Like the previously mentioned contracts, this one is characterised by a continuous payment plan at fixed intervals and usually no end date.

Using the same model as for creating recurring events in calendar systems, the user creates a payment plan, e.g. first day of each month. In time, new periodic payments are automatically added to the payment plan. Each period is considered a separate fixed-price project, where all registered hours and expenses share the invoiced value of the period.

This type of contract consists of the following key data:

• Number of expected units per period (e.g. 28 payslips or four servers)
• A unit price (e.g. EUR 15 per payslip) 
• Possible discount (e.g. 10%)
• An hourly budget per unit (e.g. 0.25 hours per payslip)
• A unit cost (e.g. EUR 1.50 per payslip for salary management software)

Based on the above key figures, the contract calculates a payment plan and a cost plan. When the user updates an item in the payment plan, the payment and all associated costs are recalculated. The number can be updated via TimeLog API, e.g. using a salary system.