Last updated November 6, 2026
To track budget hours against actual hours on a fixed-fee design project, turn the fee into an hours budget per stage before work starts, log time against those stages, and compare weekly the hours used with the share of each stage finished. The gap is your early warning, while there's still time to act.
How do you turn a fixed fee into an hours budget?
To turn a fixed fee into an hours budget, divide the fee, less any outside costs, by your average charge-out rate, then hold some of the hours back. Here's an invented example: a design studio agrees a fixed fee of €24,000 with no outside costs, and its team averages €80 an hour.
€24,000 ÷ €80 = 300 hours. The studio holds back 10%, which is 30 hours, as contingency and shares out the other 270.
| Stage | Budget hours |
|---|---|
| Concept | 60 |
| Developed design | 80 |
| Technical drawings | 90 |
| Site and handover | 40 |
| Allocated | 270 |
| Contingency | 30 |
| Total | 300 |
The charge-out rate already has your margin built into it, so 300 hours delivers the planned profit. Hour 301 starts eating it. If your stages follow the RIBA Plan of Work, the guide to RIBA stage fees covers the split, and the same method works for marketing agencies and consultants on fixed fees.
What should you compare each week?
Compare hours used with how much of each stage is actually finished. Hours used alone tell you what you've spent, and they say nothing about how far you've got.
Here's the same invented project at week 10:
| Stage | Budget | Actual | % complete | Earned hours | Variance |
|---|---|---|---|---|---|
| Concept | 60 | 68 | 100% | 60 | −8 |
| Developed design | 80 | 74 | 75% | 60 | −14 |
| Technical drawings | 90 | 12 | 10% | 9 | −3 |
| Site and handover | 40 | 0 | 0% | 0 | 0 |
| Total | 270 | 154 | 129 | −25 |
Earned hours are the budget multiplied by the percentage complete. Variance is earned hours minus actual hours, so a negative figure means you've used more than the progress justifies.
Developed design is the row that misleads. At 74 of 80 hours, it looks 6 hours under budget. It's only 75% done, so it's really 14 hours behind. Ask whoever runs the stage for the percentage complete, and ask them to judge it by what's left to do, since hours spent will flatter it.
How do you forecast where the project will finish?
You can forecast the finish in two ways, and the truth usually lies between them.
| Forecast | Assumes | Sum | Hours at finish |
|---|---|---|---|
| Best case | Everything from here goes to budget | 154 + (270 − 129) | 295 |
| On current trend | The overrun rate continues | 270 × 154 ÷ 129 | 322 |
The best case stays inside the 300 hours, with 5 of the contingency left. The trend runs 22 hours past the whole fee, which at €80 an hour is €1,760 of time nobody is paying for. Week 10 is when that's still worth knowing, because 141 budgeted hours of work are still to come.
What do you do when actual hours run ahead of budget?
Find the cause first, because each one has a different answer.
| Cause | What to do |
|---|---|
| The client changed the brief | Agree an additional fee before doing the work. See additional services |
| Extra rounds of comments | Point to the rounds in your proposal, and charge for more if the agreement allows |
| Your own rework | Absorb it, record it and fix the cause |
| Senior people doing junior work | Hand it down, since the same hours cost more at senior level |
| The estimate was wrong | Absorb it, and correct the figure for your next proposal |
For a client-driven change, send the email before you start:
The layout change you asked for on 12 March is outside the agreed brief. It will take about 16 hours, which at €80 an hour comes to €1,280 plus VAT. Please confirm by email and we'll add it as a separate stage.
What should you do when the project ends?
When the project ends, write the final hours for each stage next to the budget and keep the table. After a few projects, you'll have something better than any rule of thumb: you'll know that your concept stage takes 70 hours, not 60.
Those figures are what make the next fixed fee safe to quote. The guides on lump sum vs hourly fees and writing a fee proposal from your own past hours pick it up from there.
Tracking a fixed-fee project in ERPFlow
ERPFlow has no project budgets, rates, per-project costing or profitability, so it can't show a variance or warn you about an overrun. ERPFlow doesn't have a timer or timesheets today. Time tracking, including converting tracked time into invoices, is coming soon.
Here's what you can do today:
- The project: one Projects board for the job, linked to the customer, with one card per stage. Put the budget in the title, such as "Concept (budget 60 h)".
- The hours: type them into each card's Time spent. The board list shows the total for the project. There's no split by person, and the time carries no date.
- The comparison: keep the variance table in a spreadsheet. The cards CSV export gives you each card's Time Spent in whole minutes, with its project name, so you don't need to retype it.
- The fee: put the fixed fee on a quote and convert it to an invoice at each stage. Every conversion makes a fresh draft of the whole quote, which you edit down to that stage's share. Link the invoice to the project under Linked documents.