Time & Materials — pricing, software, and glossary
Everything about the Time & Materials model for consulting firms: PSA platform with native T&M, articles on pricing models, bench cost, KPIs; billing glossary. For IT consulting, engineering, digital agencies.
When the time-based model fits, and when it does not
Time and materials is neither better nor worse than fixed price: it fits some circumstances and not others, and most disputes are born from choosing out of habit rather than out of analysis. It fits when scope is discovered during the work, when the client wants control over direction, or in continuous capacity.
It fits badly when the deliverable is perfectly defined and the client is buying an outcome. On long projects with very different phases, the mixed model is usually the most honest: discovery on time, execution at a fixed price once the scope is known.
- Variable scope or continuous capacity as the criterion
- Fixed price when the deliverable is defined
- A mixed model by phase on long projects
- A contractual cap with advance warning in every case
The five margin leaks, and how to see them in time
On a time-based contract the margin is not decided at signature: it is built week by week. It escapes through the same places every time, and all five can be watched automatically before the damage becomes irreversible.
Hours worked and not logged, bookings outside the contract, rates not updated against the agreed review, delivered work nobody invoices because an approval is missing, and variance in the seniority mix. The last is the quietest, because the amount invoiced does not change and the cost does.
- Hours pending entry by person and project
- Bookings outside the assignment or the contract
- Rates expired against the contract in force
- Delivered work awaiting invoice, by age
