How to Invoice for Fixed Price Work

How do you invoice for fixed price work?

To invoice for fixed price work, add the agreed service or project as an invoice line item and clearly describe what the charge covers. If the complete piece of work has one agreed price, you can use a quantity of 1 and enter the fixed amount as the price.

For example, if a website design project was agreed at £1,200, the invoice could show Website design project as the description, a quantity of 1, and a price of £1,200. This communicates the agreed charge without converting the work into an hourly calculation.

What is fixed price work?

Fixed price work is work provided for a predetermined amount rather than being billed according to the final number of hours, days, or other units required to complete it. The price normally relates to an agreed scope of work.

This pricing method can be used by freelancers, contractors, consultants, designers, developers, tradespeople, and other businesses when a specific service or project has an agreed total price.

Fixed price invoice example

A simple fixed price invoice line could contain:

• Description: Website design project
• Quantity: 1
• Price: £1,200
• Line amount: £1,200

Why use a quantity of one for fixed price work?

A quantity of one can represent the complete service, project, or agreed piece of work. This allows the fixed charge to fit naturally into the same invoice item structure used for other products and services.

There is no need to invent a quantity of hours when the customer is not being charged by the hour. The quantity should represent how the work is actually being billed.

How should you describe fixed price work?

The description should identify the work covered by the fixed price. Avoid descriptions that are so vague that the customer cannot easily connect the charge with the service or project they agreed to purchase.

For example, Website design and development for company website gives more useful context than simply writing Services. The amount of detail needed will depend on the work and the information already provided elsewhere.

Fixed price vs hourly invoicing

Fixed price invoicing charges an agreed amount for the work, while hourly invoicing calculates the charge from the number of hours worked and the hourly rate. The resulting invoice line therefore communicates the price differently.

For hourly work, 10 hours at £50 per hour produces a £500 charge. If the same project was instead agreed at a fixed price of £500, the invoice could show the complete project as one £500 item without displaying 10 billable hours.

Fixed price vs daily rate invoicing

Daily rate invoicing calculates charges according to the number of billable days. A fixed price does not depend on the final number of days spent completing the agreed work.

For example, three days at £300 per day would produce a £900 charge using daily rate billing. A separate project agreed at a fixed £900 would simply be invoiced for the agreed project amount.

Can fixed price work have several invoice items?

Yes. A fixed price project does not always have to appear as one line item. If the agreed price contains clearly defined parts, separating those parts can give the customer a more useful breakdown.

For example, a design project could contain separate fixed charges for branding, website design, and additional graphics. Each item can have a quantity of one and its own agreed price.

Should you show hours on a fixed price invoice?

You do not normally need to use hours to calculate the invoice charge when the customer is being billed a fixed amount rather than an hourly rate. Adding hours as though they determine the price could make the pricing structure unclear.

If information about time spent is relevant for another reason, it can be provided separately where appropriate. The invoice itself should make clear that the billed amount represents the agreed fixed charge.

How do you invoice part of a fixed price project?

If a fixed price project is being billed in agreed stages, each invoice should clearly identify which part of the project the current charge relates to. This helps distinguish the current amount from the total value of the complete project.

For example, an invoice could describe the charge as Website project, design stage rather than presenting it as though the customer is being charged for the complete project again.

Can you invoice a deposit for fixed price work?

A fixed price project may involve an agreed deposit before work begins. When invoicing the deposit, clearly identify that the amount relates to the deposit rather than presenting it as the complete project charge.

Later invoices should also make their purpose clear so the customer can distinguish deposits, staged charges, and any remaining amount connected with the project.

How do you show additional work?

If additional work falls outside the original fixed price, it can be clearer to show it as a separate invoice item rather than changing the description of the original agreed work.

The additional item should explain what extra service or work is being charged. Its price should reflect the arrangement made with the customer for that additional work.

Can fixed price and hourly work appear on the same invoice?

Yes. An invoice can contain a fixed price service alongside work charged using another pricing method when both types of charges apply to the transaction.

For example, a project could contain a fixed £800 design charge and an additional two hours of separately agreed support at £50 per hour. Keeping these as separate items makes the different pricing methods easier to understand.

Use project details with fixed price invoices

Project details can help identify what a fixed charge relates to, particularly when a customer has several pieces of work underway at the same time. A project name or job number can provide additional context without making the line item description excessively long.

If several invoices are issued for the same project, consistent project information can also make it easier to connect each invoice with the underlying work.

Check the agreed price before sending

Before sending a fixed price invoice, check that the amount matches the price agreed for the work being billed. Also confirm that the description accurately identifies the service, project, or project stage covered by the charge.

Review any other invoice items, taxes, discounts, customer details, dates, totals, and payment information before sending the completed invoice.

Keep fixed price invoices clear

A fixed price invoice does not need to be complicated. The customer should be able to identify the work being billed, the agreed charge, and any other relevant invoice information without having to reconstruct the price from hours that do not determine the final amount.

When several fixed charges or additional services apply, separating them into clearly described line items provides a more useful breakdown.

Create an invoice for fixed price work

Fixed price work can be invoiced using a clearly described item with the appropriate agreed amount. Using a quantity of one provides a simple way to represent one complete service or project while keeping the pricing easy for the customer to understand.

InvoiceAtlas lets you add custom invoice items, quantities, rates, taxes, discounts, project information, customer details, and payment terms before downloading your completed invoice as a PDF for free.