Understanding Project Invoicing
This guide explains how to turn your project work into invoices. Whether you bill by the hour, by milestone, or a fixed price, we've got you covered.
What is Project Invoicing?
Think of Project Invoicing as the bridge between the work your team does and the money your company earns. When you spend time on a project or complete a milestone, you need to tell your customer, "Hey, this is done, please pay us."
Why does this matter?
- Revenue: It's how you get paid for your services.
- Accuracy: Ensures customers are billed exactly for the time/work agreed upon.
- Tracking: Connects your project progress directly to your financial books.
Billing Models
There are two main ways to bill for projects:
1. ⏱️ Time & Material (Billable Hours)
You charge the customer based on how much time you spend.
- Best for: Consulting, support, or flexible projects.
- How it works: Your team logs time on tasks ("I spent 4 hours coding"). You create an invoice that pulls in all those unbilled hours.
2. 🎯 Fixed Price / Milestones
You agree on a set price for the whole project or specific parts of it.
- Best for: distinct deliverables or fixed-budget projects.
- How it works: You bill when a milestone is reached (e.g., "Design Phase Complete - $5,000"). Time spent doesn't change the price.
The Workflow
Here is how the process usually flows:
Work Done Review Invoice Cash
(Tasks/Time) ──▶ (Approve) ──▶ (Create) ──▶ (Collect)
🔨 👀 📄 💰
- Work Done: Team members log time sheets or complete milestones.
- Review: Managers check if the work is ready to be billed.
- Invoice: You generate a Project Invoice.
- Cash: The customer pays the invoice.
How to Create a Project Invoice
Step 1: Go to Project Invoices
Navigate to: Project Management → Project Invoices → Create Invoice
Step 2: Choose Your Scope
You'll need to decide what you are billing for.
| Field | Description |
|---|---|
| Project | Select the project you are billing. |
| Type | Timesheets (for hours) or Fixed Amount/Milestone. |
| Date Range | If billing time, which dates? (e.g., "Last Month"). |
| Customer | Automatically filled from the project usually. |
Step 3: Generate
Click Create. The system will look for all "Billable" but "Unbilled" items that match your criteria and create a draft invoice.
[!TIP] Billable vs. Non-Billable: Not all work needs to be paid for. On tasks, you can mark items as non-billable if they are internal work or courtesy fixes.
Troubleshooting
Q: Why is my invoice empty (0 amount)?
A: This usually happens because:
- No Billable Time: Your team logged time, but maybe the tasks are not marked as "Billable".
- Already Invoiced: Maybe these hours were already included on a previous invoice.
- Wrong Date Range: Did you select the period where the work actually happened?
Q: How do I invoice a Milestone?
A: When creating the invoice, select Fixed Amount or Milestone as the type. You can then specify manually the amount or select the defined milestone from the project plan.
Best Practices
- Approve Time Weekly: Don't let timesheets pile up. Review them weekly so billing is smooth at month-end.
- Clear Descriptions: When logging time, write details your customer will understand (e.g., "Fixed login bug" instead of "coding").
- Check Rates: Make sure your "Price per Hour" is set correctly in the Project settings before invoicing.