What are billing methods?

As a business, when you and your team track time in FreshBooks, billing methods are used to determine the rate for time worked. This helps communicate the value of your time to the client, or help you put a value on your business' productivity.

Decide the billing method that determines what rate you charge for each or all entries with the below options:

• Hourly Projects
  • Standard Rate
  • Single Hourly Rate
  • Team Member Rates
  • Service Rates
• Flat Rate Projects
• FAQs

 

Hourly Projects

Standard Rate

The standard rate is automatically applied to all unbilled hours for you. Use the below steps to set up a standard rate:

1. Go directly to Tax and Financial Information here, or select the Settings section
2. Under Business Profile, select Tax and Financial Information
3. At the bottom, enter in your Standard Rate
4. Select Save Changes to finish. The new or updated rate will apply to existing and new projects.

 

Single Hourly Rate

The single hourly rate is ideal if you want all time tracked to be consistent for a particular project, regardless of who tracked the time or which service was chosen. Add or update a single hourly rate with these steps:

1. Select the Projects section
2. Then select any existing project, and select the Edit button, or select the New Project button
3. Under Project Settings, ensure Project Type is set to Hourly Project and saved
4. Then select Set Billable Rates
   
5. Under Select a billing method, choose Single Hourly Rate
6. Enter in the rate in the /hr field
   
7. If needed, check off Save this as my standard rate to apply moving forward
8. Select Done to finish. Then continue to finish setting up or editing your project. 

 

Team Member Rates

If you have invited team members working with you, team member rates allow you to apply a rate unique to each team member on all of their time entries in your account. Team member rates can be accessed within a project’s settings, or within a team member’s profile in the Team Members section using the below steps:

Team Member Rates in Projects

To update a team member's rate in a current project only, use these steps:

1. Select the Projects section
2. Then select any existing project and select the Edit button, or select the New Project button
3. Under Project Settings, ensure Project Type is set to Hourly Project and saved
4. Then select Set Billable Rates
   
5. Under Select A Billing Method, choose Team Member Rates
6. Enter in the rate for each team member, including yourself
   
7. Select Done to finish. The new rates will apply to the current project only. Next, continue to finish setting up or editing your project. 

To apply the new rate for future projects moving forward, use the Team Member Rates in Team Members steps below to edit it in team member's profile instead.

 

Team Member Rates in Team Members

To update a team member's rate in for new projects moving forward, use these steps:

1. Select the Team Members section
2. Then select the team member you want to review
3. Under Team Member Settings, select Set Billable Rate
   
4. Add or update the rate and select Save to finish. This rate will be applied to new projects moving forward.

 

Service Rates

Service rates allows you to bill different rates for each service, regardless of the client you're billing. Service rates are set up on a per-project basis. Add or update a service rate with these steps:

 

If needed, use the Items and Services section to create services and set service rates.

 

1. Select the Projects section
2. Then select any existing project and select the Edit button, or select the New Project button
3. Ensure the project has services added first
4. Under Project Settings, ensure Project Type is set to Hourly Project and saved
5. Then select Set Billable Rates
   
6. Under Select A Billing Method, choose Service Rates
   
7. If the service has a set service rate already, this will be populated by default - if needed, modify the rate if it's different for this current project
8. Select Done to finish. Any updated service rates will apply to the current project only. Next, continue to finish setting up or editing your project.

 

Note: If your services' rates have changed moving forward, update the service in Items and Services instead. 

 

Flat Rate Projects

A flat rate project is useful if you want to bill for a single fixed rate regardless of how many hours are tracked towards a project. Create a flat rate project with the steps below:

1. Select the Projects section
2. Then select any existing project and select the Edit button, or select the New project button
3. Under Project Settings, ensure Project Type is set to Flat Rate Project and saved
4. Then select the Flat Rate field at the bottom of the project and enter in the rate
   
5. Next, continue to finish setting up or editing your project.

 

Notes:

• Generate Invoices - When an invoice is generated for a flat rate project, the flat rate is displayed as a single line item only, regardless of how many time entries are tracked
  • The flat rate project's full amount is populated by default, this can be modified to a partial amount instead if you need to generate multiple invoices for the same flat rate project
  • E.g., a flat rate project of $100 can have two generated invoices of $50 each, adding up to $100 altogether
• Time Entries - All time entries associated with a flat rate project are automatically marked as non-billable, and individual time entries will not appear on the invoice 

 

FAQs

Which billing method is used if I track time that's not associated to a project?

If you log a time entry that is only associated to a client and not a project, the billing method will be applied in the following priority: 

1. Service Rate - Used if the time entry is assigned to a service over any other rate
2. Team Member Rate - Used if the time entry was logged by a team member and no service rate is set
3. Standard Rate - Used if no service or team member rate is set
4. Default Rate - 0.00 / hr is used if no standard rate or team member rate is set.

 

What happens if I switch my project type after my project has been created?

Changing your hourly project to a flat rate project will result in the following: 

• All future time entries become non-billable
• Previously logged time entries will retain the original billing method applied at time of entry
• Generating an invoice for a flat rate project will result in a mix of old time entries using the old billing methods and new time entries using flat rate billing method

 

Changing your flat rate project to an hourly project will result in the following:

• All previously logged and future time entries can be either marked as billable or non-billable 
• Previously logged time entries will retain original flat rate billing method