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Billing Types

Each client in Rize can be configured with one of three billing types. The billing type determines how revenue is calculated for that client's work.

Overview​

Rize supports three billing types:

  • Hourly: Clients are billed based on hours worked × hourly rate
  • Retainer: Clients pay a fixed monthly amount regardless of hours
  • Hybrid: Clients pay a fixed retainer plus hourly rate for hours beyond an included amount
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If no billing type is set, Rize defaults to hourly billing behavior, using hourly rates from the project, client, or team member.

Hourly Billing​

Hourly billing is the most straightforward method. Revenue is calculated by multiplying billable hours by the hourly rate.

How It Works​

  • Each billable time entry uses an hourly rate
  • Revenue = hours worked × hourly_rate
  • The hourly rate comes from (in order of priority):
    1. Project hourly rate
    2. Client hourly rate
    3. Team member hourly rate

When to Use Hourly Billing​

  • Clients who prefer to pay for actual time worked
  • Projects with variable scope
  • One-time or short-term engagements
  • When you want maximum flexibility

Example​

You work 8 hours on a project with a $150/hour rate:

  • Revenue = 8 hours × $150 = $1,200
Screenshot showing an hourly billing client with time entries displaying hourly rates and calculated revenue

Image placeholder description: A screenshot of the client billing settings page showing an hourly billing client. The image should show:

  • The billing type dropdown set to "Hourly"
  • An hourly rate field showing a dollar amount (e.g., $150/hour)
  • A time entry or report showing hours × rate = revenue calculation
  • Clear visual indication that revenue is calculated from time entries

Retainer Billing​

Retainer billing provides predictable monthly revenue. Clients pay a fixed amount each month, regardless of how many hours are worked.

How It Works​

  • Client pays a fixed monthly retainer amount
  • Revenue is recognized daily: retainer amount ÷ days in billing period
  • Time entries do not have hourly rates (they're set to nil)
  • Time still contributes to costs and profitability calculations
  • Revenue comes entirely from the retainer's daily allocation

Setting Up a Retainer​

When you set a client to retainer billing, you'll need to specify:

  • Retainer Amount: The fixed monthly payment (e.g., $3,000)
  • Billing Period: Typically monthly, but can be customized

Rize automatically creates a retainer for the current month when you switch a client to retainer billing.

When to Use Retainer Billing​

  • Clients who prefer predictable monthly costs
  • Ongoing retainer relationships
  • When you want guaranteed monthly revenue
  • Projects where scope is consistent month-to-month

Example​

A client has a $3,000 monthly retainer:

  • Daily revenue = $3,000 ÷ 30 days = $100/day
  • If you work 40 hours or 10 hours, revenue is still $100/day
  • Profit = daily retainer revenue - costs
Screenshot showing how to set up retainer billing for a client

Image placeholder description: A screenshot of the client edit form showing retainer billing setup. The image should show:

  • The billing type dropdown set to "Retainer"
  • A retainer amount field (e.g., $3,000/month)
  • The billing period selector (monthly)
  • A visual indicator showing how the retainer amount is divided into daily revenue
  • Maybe a preview or tooltip explaining the daily revenue calculation
Screenshot showing retainer revenue recognition in daily stats or reports

Image placeholder description: A screenshot of a profitability report or daily stats view showing retainer revenue. The image should show:

  • A calendar view or daily breakdown showing consistent daily revenue
  • Multiple days with the same revenue amount (demonstrating daily allocation)
  • Time entries showing no hourly rates (or nil rates)
  • Clear separation between retainer revenue and hourly revenue (if any)
  • Profit calculation showing retainer revenue minus costs

Hybrid Billing​

Hybrid billing combines the predictability of retainers with the flexibility of hourly billing for overage work.

How It Works​

  • Client pays a fixed monthly retainer
  • A certain number of hours are included in the retainer
  • Hours worked beyond the included amount are billed at an hourly overage rate
  • Time entries have no hourly_rate (set to nil)
  • Revenue = daily retainer base + daily overage allocation

Setting Up Hybrid Billing​

When configuring hybrid billing, you'll specify:

  • Retainer Amount: The base monthly payment (e.g., $2,000)
  • Hours Included: Number of hours covered by the retainer (e.g., 20 hours)
  • Overage Hourly Rate: Rate charged for hours beyond the included amount (e.g., $150/hour)

Overage Calculation​

Rize calculates overage at the end of the billing period:

  1. Sums all billable hours for the period
  2. Calculates overage = max(total_hours - hours_included, 0)
  3. Calculates overage revenue = overage_hours × overage_rate
  4. Allocates overage revenue proportionally across days based on hours worked each day

When to Use Hybrid Billing​

  • Clients who want predictable base costs but flexibility for additional work
  • Projects with variable scope that may exceed a baseline
  • When you want to incentivize staying within included hours
  • Retainer relationships where occasional overage is expected

Example​

A client has:

  • $2,000/month retainer
  • 20 hours included
  • $150/hour overage rate

Scenario 1: Under included hours (15 hours worked)

  • Base daily revenue = $2,000 ÷ 30 = $66.67/day
  • Overage = 0 hours
  • Total revenue = base only

Scenario 2: Over included hours (30 hours worked)

  • Base daily revenue = $2,000 ÷ 30 = $66.67/day
  • Overage = 30 - 20 = 10 hours
  • Overage revenue = 10 × $150 = $1,500
  • Daily overage allocation = proportional to hours worked each day
  • Total revenue = base + overage
Screenshot showing how to configure hybrid billing with retainer amount, included hours, and overage rate

Image placeholder description: A screenshot of the client edit form showing hybrid billing configuration. The image should show:

  • The billing type dropdown set to "Hybrid"
  • Three fields visible:
    • Retainer amount (e.g., $2,000/month)
    • Hours included (e.g., 20 hours)
    • Overage hourly rate (e.g., $150/hour)
  • A visual explanation or tooltip showing how hybrid billing works
  • Maybe a preview showing example calculations
Screenshot showing hybrid billing with overage calculation and allocation

Image placeholder description: A screenshot of a profitability report showing hybrid billing with overage. The image should show:

  • A billing period summary showing:
    • Base retainer amount
    • Hours included vs hours worked
    • Overage hours calculated
    • Overage revenue
  • Daily breakdown showing base revenue + overage allocation per day
  • Visual indicators showing which days had overage hours
  • Clear calculation showing total revenue = base + overage

Changing Billing Types​

You can change a client's billing type at any time. When you do:

  • Switching to Hourly: Any active retainers are paused
  • Switching to Retainer/Hybrid: A new retainer is automatically created for the current month
  • Switching away from Retainer/Hybrid: Active retainers are paused
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Changing billing types may affect historical profitability calculations. Revenue recognition follows the billing type active during each time period.

Screenshot showing the billing type dropdown and what happens when changing billing types

Image placeholder description: A screenshot showing the billing type selection interface. The image should show:

  • A dropdown or selection interface with all three billing types
  • A warning or info message explaining what happens when changing billing types
  • Visual indication of the current billing type
  • Maybe a confirmation dialog or preview of changes

Next Steps​