Billing types define how your services are billed and tracked for revenue. Each service in a budget must have a billing type, and this choice directly impacts invoicing, reporting, and profitability analysis. There are three billing types available in Productive:
Fixed
Time & Materials
Non-billable
📌 Note: Billing types are one piece of the puzzle. How users can track time, log expenses, or be booked for a service also depends on the Unit (hour, day, piece).
We covered this in Tracking Units: Hours days or Pieces.
Services exist both in deals and budgets, but invoicing is only possible from budgets. Services in deals cannot be invoiced directly. To invoice them, the deal must first be marked Won, and the related time entries and expenses transferred into a budget.
Fixed Billing Type
With the Fixed billing type, you agree on a set amount with your client, regardless of how much time your team spends.
The service can be invoiced at the fixed price defined in the budget. You can invoice it all at once or partially (e.g., 20% upfront), or choose to invoice progressively as time is logged.
Estimates can be different from the sold quantity. For example, you might sell 100 hours but estimate the work at 90 hours. The estimated hours are used for creating bookings in the Resource Planner.
Useful for projects with clearly scoped deliverables.
Example:
You agree to deliver a Design Sprint service for $32,000. Even if your team spends more or fewer hours than expected, the invoice always stays at $32,000. You may, however, choose to invoice portions of that $32,000 as your team logs time.
Time and Materials (T&M)
With Time and Materials, clients are billed based on actual hours worked or expenses incurred.
Logged time and expenses directly determine what can be invoiced.
For Time and Materials services, the estimate cannot be adjusted. It always equals the quantity sold. This ensures accurate tracking and billing based strictly on actual hours and expenses.
Budget planning: You can set the total hours you plan to sell, which calculates the budget total for the service.
Ideal for projects with changing scope or ongoing work.
Example:
Quantity = 300 hours × €100/hour → Budget total = €30,000. You provide Frontend Development at $100/hour. If your team logs 25 hours in a month, the invoice is $2,500 (25 × $100).
Non-billable
The Non-billable type is used for internal or client-facing services that should not be invoiced.
Time and expenses can still be tracked for reporting and utilization.
No revenue is generated from this service, only cost.
Commonly used for training, internal meetings, pro-bono work, or expenses that are not billed to the client due to company policy or agreements.
Example:
Your team logs time for the Project Management service. These hours and costs are tracked for reporting purposes but never appear on a client invoice.
Billing Types and Revenue Recognition
Billing types determine how revenue is recognized in Productive, in combination with the service’s unit and tracking settings:
Fixed: revenue sits with the service and is distributed as time is tracked, expenses logged, or future bookings made. Remaining revenue is recognized according to your settings (start, end, or budget delivery date).
Time and Materials: revenue is recognized as time and expenses are logged, and future bookings are made.
Non-billable: does not generate revenue.
👉 Learn more in our article: Revenue Recognition in Productive.
Mixing Billing Types Within a Budget
Services in a budget can be set up in any way that suits your needs. For example, you might have two services billed at a Fixed amount, one billed as Time and Materials, and another marked as Non-billable. This flexibility lets you tailor each budget to match the way you deliver and bill work.
📌 Note: If you create a budget using the Simple Budget Editor, all services will share the same billing type for simplicity. If you need more control, you can convert that budget to the advanced editor shown in this article, where you can freely mix and match billing types.
Related Setup Options
When setting up services in Productive, you may also want to check:
What Are Services in Productive?
Understand the definition, purpose, and role of services across tracking, scheduling, and invoicing.
👉 Learn more here.
Service Names, Sections, and Descriptions
Give each service a clear label, add descriptions, and group them in sections for better visibility.
👉 Learn more here.
Service Types: Building Blocks of Your Budget
Categorize your services to analyze performance and profitability in the long run.
👉 Read about Service Types.
Units
Define how you measure and track delivery (hours, days, or pieces).
👉 See how Units work.