Fixed-price contracts can be beneficial to both consultants and clients. Both parties know exactly what they’re getting. Scroll down for the video.
Define Fixed-bid contract: An employment deal where the price is agreed up before the work begins, and cannot change.
Most fixed-bid or fixed-price contracts are paid on milestones. Clients usually agree to pay in three installments: 1/3 up front, 1/3 at beta, and 1/3 at completion. But milestones can be anywhere in the middle for any reason. The contract total will always be the fixed agreed-upon price.
Why are fixed-price contracts good for clients?
The most obvious reason is that fixed-price contracts can never run away into huge cost overruns. The supplier will never get more than agreed.
Why are fixed-price contracts good for consultants and suppliers?
The supplier has fewer incentives to accept a deal like this, but there are some upsides. One is that the deal cannot be canceled partway, leaving the consulting party without revenue. Another is that the deliverables are tightly fixed, and scope creep is less likely to occur.
Have you tried the invoice milestones on Standard Time®. Good news, you can do it today. Just download a plug in your milestones. Then run a client invoice for each payment milestone.