Individuals will also track any expenses incurred as part of the project and pass them on to the client for reimbursement.Īlthough time and materials engagements are one of the simplest types of professional services contracts, the most successful firms will use robust project accounting software to track their progress. Under this contract structure, time is tracked for each individual performing work and is then billed at a pre-negotiated hourly or daily rate. One of the most common contract types for professional services engagements, time and materials (T&M), enables a firm to bill their clients for the amount of work that they perform. #1 – Time and Materials Professional Services Contract Structures Regardless of which contract structure works best for your professional services organization (PSO), make sure your professional services software fully supports the time tracking, forecasting, budgeting, invoicing, and revenue management in an efficient and scalable manner. We will then dive into three additional professional service contract examples that incorporate additional components to shift risk, reduce variability, and up-sell existing work. In this post, we will look at three of the most common professional services contracts, and present examples where each type will perform well.
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