What is the difference between time and materials and fixed price?

With time and materials, you bill the time actually spent at an hourly or daily rate. With fixed price, you sell a deliverable at a set price for a defined scope. Time and materials suits evolving work, fixed price suits well-scoped projects.

How do I justify my hours to the client?

Attach a detailed report to each invoice showing the date, project, task and duration. A clear export by client and by project, like the one Rytmely offers, makes the count verifiable and limits disputes.

How do I calculate my hourly rate for time and materials?

Start from your target income, add all your costs, then divide by your genuinely billable hours in the year. You get a floor, which you then adjust for the value delivered and the market.

Why track time continuously rather than at month end?

Because memory always underestimates real time. Timing your work as you go prevents forgotten tasks and ensures every hour worked is actually billed.

// Guide

How to bill for time spent (time and materials): a practical guide

Agencies, freelancers and IT services firms: understand time and materials billing, set the right hourly rate, and turn every hour worked into a justified invoice, with no unlogged time lost.

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What is time-based (time and materials) billing?

Billing for time spent, also called time and materials, means invoicing your client based on the time actually worked, usually at an hourly rate or a daily rate. You are not selling a fixed-price deliverable, but your availability and expertise over a given period.

This model is common among agencies, freelancers and IT services firms because it fits the reality of engagements where the scope evolves. Every hour spent on a client, a project or a task is recorded, then grouped at the end of the period to produce a detailed invoice.

Billing unit: the hour or the day.
What the client pays for: real working time, not a fixed package.
Essential prerequisite: reliable, detailed time tracking.

Time and materials or fixed price: when to choose what?

A fixed price sets one global amount for a scope defined in advance. It reassures the client on budget but puts all the overrun risk on you. Time and materials bills the real time worked: the risk is shared, provided you stay transparent about the hours.

In practice, choose time and materials when the need is fuzzy, evolving or exploratory, and fixed price when the scope is clear and stable. Many agencies combine both depending on the project phase.

Choose time and materials: uncertain scope, maintenance, long-term support, R&D.
Choose fixed price: well-defined deliverable, frozen spec, client focused on the total cost.
Tip: offer a capped number of hours to reassure without losing flexibility.

How to set your hourly or daily rate?

A good rate is not guessed, it is calculated. Start from your target annual income, add your costs (tools, contributions, premises, time off, training), then divide by the number of hours you can actually bill in a year. That figure is your floor.

Then adjust for perceived value, your specialization and the market. Rare expertise or high stakes for the client justify a higher rate than simple cost-based billing.

First compute your hourly cost, then add your margin.
Don't forget non-billable hours: sales, admin, training.
Review your rate at least once a year and each time your skills grow.

Tracking your time properly, by client and by project

Time and materials only works if tracking is rigorous. The classic mistake is reconstructing your hours from memory at month end: you always underestimate, and you lose billable time. The right habit is to time your work as you go, task by task.

Structure your entries by Client, then Project, then task Label. This is exactly the logic of Rytmely, which organizes each entry by Client then Project then Label, so you can instantly find the time spent on each item.

Start a timer as soon as a task begins, stop it when the task ends.
File every hour under the right client, project and label.
Separate billable from non-billable time right at entry.

Turning tracked time into an invoice

A time and materials invoice must be verifiable by the client. Attach a detailed time report showing, for each line, the date, project, task and duration. This transparency reduces disputes and speeds up payments.

In concrete terms, you export your billable time for the period, group it by project, then apply your rate. With Rytmely, billable time exports to CSV or JSON, ready to attach to the invoice or import into your billing tool.

Always provide a detailed justification, not just a total.
Group by project or phase for a clear read on the client side.
Export (CSV/JSON) to avoid re-entry and copy errors.

Mistakes to avoid (unlogged time = lost revenue)

Every forgotten hour is an unbilled hour, and therefore lost revenue. Over a month, a few unlogged minutes per day easily add up to a full day of work given away for free.

Other classic traps: mixing time from several clients, neglecting small tasks (emails, calls, meetings), or waiting too long before invoicing. Immediate, regular tracking protects your cash flow.

Never reconstruct your hours from memory at month end.
Log the micro-tasks too: they add up fast.
Invoice at regular intervals to smooth cash flow and limit oversights.

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