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Planview Customer Success Center

Capped Times and Materials billing type

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Capped Time and Materials (T&M) is a hybrid billing model commonly used in consulting, software development, and other professional services. It combines the flexibility of Time and Materials billing with the cost predictability of a fixed price cap.

The Billing Type setting field at the project level for Billable Projects controls how financial planning schedules Budget Revenue, aggregated into work item Expected Revenue, and Actual Revenue aggregated into work item Actual Revenue, and is used for Revenue Forecasting and Revenue Recognition.

           

Prerequisites

f you can't configure your organization system settings or set User permissions, contact your administrator to ensure that the following prerequisites are met.

Enabled Global Settings

  • Set the Organization Currency Type in the global settings so that Project revenue and cost calculations are set by default to the correct currency in your org.
  • Enable the system settings 9.1: Budget Management. Defines whether to activate the budget module which enables budgeted cost and actual cost management.
  • Enable the system settings 9.3: Projects are Billable by default. Defines whether projects are billable by default, where revenue fields and variances are calculated.
  • Set the 13.9 Timesheet Actuals Recognition Date that defines which date period to use for recognizing as cost and revenue, either the Reported Date or the Approval date.

User Permissions and Profile

  • Enable the Financial permissions for Users so that they can access financial fields and the financial planning view
  • Ensure the User Profile Property Card includes a Financial section with the following standard fields: 
    • Budgeted Cost, Actual Cost, CPI
    • Expected Revenue, Actual Revenue, RPI
    • Planned Profit, Profit, Earned Value, % Profitability

Project setting

  • Set the Time Reporting settings at the Project level: Actual Effort Updated from Timesheets and Reportable are enabled. 
  • Set the Billing Type Project field to Times and Materials
  • Set the Agreed Date for Exchange rate or Currency Exchange Rate Card at the Project level if project calculations should have difference Exchange Rate than the Org setting. Note that Fixed Price work items that use a different Revenue Currency Type from that of the Organization Base Currency, use the exchange rate of the project’s Agreed Date for Exchange Rate or the Project-level Exchange Rate if one is set. 
  • Set the Resources Prices and Rates from the Project Work Plan > Resourcing > Price & Rates popup. This will drive financial calculations in the application based on rates. 
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Working with Capped T&M

With this billing type, you can set a fixed project price, and the expected revenue will be capped at that amount. The financial view will display time-phased T&M values for the project until the capped price is reached.

Log in as a Project Manager.

  1. Create Project and set the due date and make it active. In our example, the due date is set to April 2026.
  2. Set the Revenue Currency Type column so that the Fixed price will be set for your Expected revenue in the correct currency. In our example, it is set to USD.
  3. Define the Fixed Price for the Project.
  4. Add Milestones and Tasks sub-items to your project and schedule resources. 
  5. In the Financial view:
    • Go to Settings and add the following columns: Budget cost, Forecast Cost, Budget Revenue, Forecast Revenue, Actual Cost, Actual Revenue.
    • The Summary mode will show the calculation for the Project level in the Labor section at the time of the planned entries in Resource planning:
      • Budgeted Cost =  Planned Work * Hourly cost Rate
      • Expected Revenue= Planned Work * Hourly billing Rate
    • The Capped/Fixed Price section will show the fixed price for the Project when the Project is due. If the Expected Revenue is lower than the fixed price, it will show the expected revenue based on T&M calculation. Otherwise, it will show the capped price. 
  6. Report timesheets to compute actuals based on reported times and refresh the Financial Planning View.
  7. Suggested columns for actuals are updated in the Financial view based on T&M calculation and when the cost and revenue is recognized, either the Reported Date or the Approval date (Global setting):
    • Suggested Actual Cost = Actual Effort * Hourly Cost Rate
    • Suggested Actual Revenue= Actual Effort * Hourly billing Rate
    • The actual Revenue will not show any data as the actual revenue is based on the capped fixed price. 
  8. Set the project to Complete.

AdaptiveWork will calculate automatically CPI, RPI, Planned Profit, Profit, Earned Value, and % Profitability.