Fixed Price vs Time & Materials Billing | Restorations By Sabra
Financial Process

Fixed Price BillingVSTime and Materials Billing

Choosing a Model

When to choose a fixed fee
vs. a time & materials contract?

Both models work — the right one depends on how well-defined and how complex your project is.

Choose a fixed fee contract when…
Your project is not complicated and its scope can be easily defined from the beginning.
Your project is small and there are no changes anticipated.
Choose a time & materials contract when…
Your project is complex.
The duration and scope of the project are hard to determine.
You want more control over what's being developed and in what order.
A project has dynamic requirements.
You need more flexibility.
Side by Side

Fixed Price Model vs.
Time and Materials.

Nine ways the two billing models actually behave once a build is underway.

Category
Fixed Price Model
Time and Materials
Scope
Requirements are detailed from the beginning. Limited scope.
Work scope is wide-ranging and vision-driven, with room for edits.
Risk
Unforeseen surprises or change orders can stall or stop a project — but cost is fixed.
An undefined work scope can lead to unknown timelines and increased cost — uncertainty of budget.
Project Managers' Priorities
Respecting the scope and avoiding changes.
Focuses on quality, process, and visionary concept while allowing for change orders.
Flexibility
Hard to adapt to unexpected challenges, and the process is bureaucratic.
Easy and flexible. A lot of adaptability to changes and challenges.
Deliverables
The team delivers exactly what the client asked for — not necessarily what was needed.
Deliverables might be adapted because of insights provided during the project.
Relationship
Might feel tense when it comes to unexpected situations.
Partnership spirit. Full involvement in every stage to provide the best results.
Updates
Respecting the scope and avoiding changes.
Harmony of work scope, change orders, quality control, and Build ROM.
Final Cost
Known cost upfront, plus backup from the provider to avoid risks — but unknowns can derail project fulfillment.
Unknown at the start, but adapts to a budgetary ROM with refined work scope.
Time to Start
Takes up to 30–90 days to scope or bid precisely. Often dependent on inferior local shops due to transport cost for bids.
Ability to start right away. Clients can choose shops anywhere in the world.
Quick Reference

Time and Materials vs.
Fixed Price, at a glance.

Fixed Price

Being certain about the cost.
Established deadlines.
No need to control the process — no collaboration necessary.
Higher cost of the project — inflated bids.
Worse response to changing conditions.
Longer preparation — bid process hinders start.

Time and Materials

High flexibility to changing requirements.
Faster project start and dynamic decision-making process.
Better control over the project.
Lower certainty over the budget — not a fixed bid.
Requires being more involved throughout.
Some uncertainty when it comes to the timeline.
The Full Picture

Pros & cons,
side by side.

Time and Materials

PROS
  • Flexible approach to changes — change orders are embraced.
  • High chance to create a marketable product — phase edits.
  • Earlier start to the project — no delays in start time.
  • More control over the development process — visionary edits.
  • Easier product optimization — change orders are applicable.
CONS
  • Chance that the overall budget would be higher than desired with changes in work scope or new problem discoveries.
  • High involvement of a client — client collaboration is very necessary.
  • Hard to plan the deadlines — the actual date is not fixed.

Fixed Price Model

PROS
  • Full control over the budget — the work scope and cost are fixed.
  • No need for client's active involvement — cookie-cutter build.
  • More control over the timeline — timelines are more specific.
CONS
  • No flexibility in reaction to changes.
  • Higher risk of creating a product with little market demand.
  • Sticking to a timeline/fixed budget can compromise quality.
  • No room for optimization — no adjustments or edits.
  • Later start of development — the estimation process hinders.
  • Risk of higher cost of the project — inflated protectionary bids.

Sabra builds on
Time & Materials.

It's the only model that lets us take on any project, from anywhere in the world, sight-unseen — and still be fair to both sides.

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